PIA: Upstream regulatory commission sets 12-month timeline for deliverables

FG blocks underperforming oil firms from accessing new acreages –

From Uche Usim, Abuja

The Nigerian Upstream Petroleum Commission (NUPRC), has adopted a new strategy in acreage allocation, which automatically blocks any oil and gas company that performed poorly in previous lease contracts from accessing new jobs as stipulated in the new Petroleum Industry Act (PIA).

The acreage management system allows the issuing Authority (NUPRC) to specify a timeline during which investment must be accomplished on the allocated licence covering the assigned portion for the purposes of oil prospecting and exploration.

The Chief Executive of NUPRC, Gbenga Komolafe, in a statement on Friday, stated that the new arrangement seeks to optimize value from acreage management and administration.

He added that qualification for new contracts would be based on scaling a holistic assessment of previous performance of all licenses and leases awarded before the PIA era.

“The assessment would seek to identify the areas of regulatory under performance in acreage management and administration leading to failure of licensees and lessees’ inability to carry out licence and lease performance obligations including acquisition of data, drilling of wells and maturing of identified leads and prospects within the licence or lease span,” Komolafe explained.

He listed the aspects of the new strategy to include review assignee performance and contributions to licences and lessees, review compliance performance in reporting milestones by licensees and lessees and the administration of regulatory consequence mechanisms, review loss allocation by licensees and lessees under the PIA, including, production, cost and revenue, and performance review of existing multi-client arrangements and streamlining on-going activities to the PIA.

“The assessment framework would require all existing licences and lessees to undergo a performance assessment audit of operation of licences and leases based on a framework to be developed by Lease and focused on OPLs, OMLs, Marginal Fields and Multi client arrangements. Evaluation is expected to cover: Compliance with environmental requirements and with work programme commitments, compliance with revenue payment obligations and reporting obligations, audit of operating systems and third-party provider activities and assessment of assignee roles and performance obligations” he added.

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