The federal government yesterday began the first phase of its stakeholders’ consultations on draft regulations on the Petroleum Industry Act (PIA) in a bid to beat the various timelines set out in the new law.
Although the law was passed in August last year, it is mandatory that oil and gas industry stakeholders meet to discuss the administrative and operational rules before a proper take-off of the legislation as it concerns certain clauses.
In the first instance, some issues to be dealt with will centre around royalties, licensing rounds, fees and rentals as well as the implementation of host community fund in line with Section 235 of the PIA.
It will also focus on finalising the 2020 bid round through issuance of Petroleum Prospecting Licences (PPLs) in line with Section 94 (2) of the PIA, make regulations on the Nigerian upstream fee and rent regulations.
Other areas of concentration include the petroleum licensing round regulations, domestic gas delivery obligations regulations, Nigeria conversion regulations , Nigeria royalty regulations and the Nigeria host community (commission) regulations.
The draft regulations were prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in conjunction with the Presidential Steering Committee on the PIA, headed by the Minister of State, Petroleum, Mr Timipre Sylva.
Speaking during the event in Abuja, Sylva stated that the enactment of the PIA was expected to open up opportunities in the oil and gas sector of the economy.
However, he noted that the challenge posed by the huge divestments in the hydrocarbon explorations by oil majors in the country in the past as a result of the global energy transition calls for more innovative ways in the exploitation and exploration of fossil fuel in the country.
The minister stated that if Nigeria must continue to be relevant at the global stage, it must in designing any regulation put in focus how it can balance the energy base load for Nigeria so that the country will not be left behind in the energy transition train, even while still harnessing its rich natural hydrocarbon reserves.
According to Sylva, a robust engagement would create the platform to brainstorm in a constructive manner and harness the necessary input from various stakeholders to further clarify the draft regulations and eventual firming up of the final regulations.
Stressing that effective regulations are key to harnessing the gains of the PIA, he pointed out that government has a mandate of ensuring sound management of the oil and gas sector considering the key role the sector plays in the revenue generation of the country.
“ The effort of commission in the preparation of these draft regulations to beat the deadline set by the law for the commencement of the implementation of the PIA is quite commendable.
“ I am hopeful that the regulations when fully implemented will help in no small measure in the smooth take-off of the day-to-day operations of the NUPRC,” he assured.
In his comments, the NUPRC Chief Executive Officer, Mr Gbenga Komolafe, stated that the meeting was a statutory prescription and a critical milestone in the implementation of the PIA.
As a law-abiding regulator and in compliance with the provisions of the PIA, he explained that the meeting was convened for stakeholders to make robust input and have discussions around the entire draft regulations leading to finalising the document.
Aside the deadlines set out by the law, he noted that there was the need to expedite action to conclude the regulations-making process in a manner that Nigeria can hedge against the impact of the energy transition and take advantage of the oil and gas supply gap resulting from the current developments in Russia and Ukraine.
He expressed optimism that the engagement will be fruitful, and all grey areas will receive adequate clarification with a view to giving meaning to the intent of the PIA and in a manner that the regulations will become attractive to investors and user-friendly in implementation.
Source: Thisday
