Percy Onyeka
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has read a riot act to operators/producers in the oil and gas industry, that it would not hesitate to apply necessary sanctions to erring companies whose activities constitute a hindrance to the effective implementation of the Nigerian Gas Flare Commercialisation Programme (NGFCP), the country’s climate action plan.
The Commission Chief Executive (CCE), Engr Gbenga Komolafe, who handed down the warning on Tuesday in Abuja at an Executive Session with the producers underscored their pivotal role in the successful implementation of the NGFCP, insisting that the Commission would not relent to apply necessary sanctions against erring operators, to the extent of revocating their licenses or leases.
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The caution was contained in a press statement signed by the Head, Public Affairs and Communication, Mrs. Olaide Shonola, and made available to New National Star Newspaper.
Engr. Komolafe said the Commission would activate the necessary provisions of the Petroleum Industry Act (PIA) 2021 and enabling regulations such as the Gas Flaring, Venting and Methane Emissions (Prevention of Waste and Pollution) Regulations 2023 to ensure strict implementation of the programme, recalling that that at the inaugural session of the Producers Forum earlier in the year the significance of the NGFCP to achieve the elimination of the unwholesome practice of and wasteful of gas flaring with its attendant social, health and environmental negative impacts was underscored.
“Moreover, as a nation, the NGFCP represents one of our key climate actions to combat emissions and support Nigeria’s transition endeavors. The imperatives of the Programme have taken on added significance with the recent pronouncements of Mr. President at global fora and the international attention that the Programme has attracted. Nigeria cannot afford to fail! We cannot fail!”, he emphasized.
He noted that the Commission has so far issued relevant letters of award to Forty-Two (42) individual companies for all Forty-Nine (49) Flare sites on offer, adding that the sites represent locations that are within the operating areas of fifteen (15) companies present at this engagement.
The CCE said that whereas the Commission had received some encouraging feedback on support by some producers, many awardees have decried the lack of engagement by producers contrary to the spirit of the programme and the Commission’s letter to them in respect of the programme.
“Consequently, this Executive Session has been convened to keep us abreast of the critical stage we are in the NGFCP and inform us of the need to progress the project implementation with the urgency required and proceed with the onboarding of the awardees,” the CCE stated, while indicating that the meeting was to provide an avenue for producers to share their inputs, comments, concerns, and recommendations to enrich the NGFCP.
The CCE identified and addressed some key issues in the programme even as he warned that the Commission would not entertain any ploy to frustrate Awardees, the efforts of the Commission or the Nigerian government.
The issues include; the issuance (last year) of “Cease and Desist” letters to Producers, instructing them to refrain from developing flare gas utilisation projects and frustrating the flare profile earmarked for the NGFCP.
Another issue was Commercial Agreements between the Producer/Awardee which the Commission expects to be at an advanced stage based on the issued template.
Other issues are; access to flare site and additional data/site-specific information, reduction in volumes of flare profile and potential benefits to producers, stressing that irrespective of the challenges the success of the NGFCP will be a win-win for all.
The CCE pointed out that the global pressure on oil and gas to combat emissions and decarbonise amidst climate and environmental activism should represent an added reason to leverage the NGFCP as a quick-win solution to address flaring.
He however, said that the Commission was mindful of concerns expressed by some producers during earlier engagements, such as; safety concerns of producers’ assets and personnel on the sites, potential impacts on upstream operations, prior investments in flare gas capture, Awardee technical and financial capacity for project deliverability, and termination of flare payment obligation on producers, assuring them of adequate support.
“For instance, we have emplaced a rigorous regime whereby the engineering design and construction of the third-party connection facilities are subject to the prompt review of the respective Producer, as part of the Commission’s approval process. Flare Site Permit Holders would likewise be required to comply with industry specifications and use approved vendors acceptable to the applicable Producer for the construction of Gas connection assets.
“These are just a few of the measures in place to provide reasonable comfort to Producers and ensure safe, reliable, and uninterrupted operations during the implementation of the NGFCP.”
The CCE nonetheless appreciated the continued commitment of the producers towards ensuring the successful execution of the NGFCP 2022 programme and addressing the effects of gas flaring and decarbonising upstream operations and sought insights and perspectives on ways to deepen support and ensure programme success, the statement noted.
Techrectory with Agency Report.
