NUPRC: We’ll adopt new approach to acreage allocation to optimise performance

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it will adopt a new strategy for a performance-centred acreage management to optimise value.

Gbenga Komolafe, chief executive officer, NUPRC, said this in a statement on Friday.

Komolafe said the commission will adopt a new approach in the administration of licences and leases, especially as it concerns acreage allocation, to attain the objectives set by the Petroleum Industry Act (PIA).

He said this would optimise value in the new acreage management and administration of allocation principles enunciated in the law.

“To position the commission on a performance-centred paradigm for acreage management, a new strategy of acreage allocation, management and administration based on a holistic assessment of the prior performance of all licences and leases awarded prior to the PIA is required,” the statement reads.

According to Komolafe, the commission seek to identify the areas of regulatory underperformance in plot management and administration, leading to the failure of licensees and lessees’ inability to carry out licence and lease performance obligations.

He added that this would also help to identify other issues, including the acquisition of data, drilling of wells and maturing of identified leads and prospects within the licence or lease span.

“Other aspects of the new strategy would include reviewing loss allocation by licensees and lessees under the PIA,” he added.

“These include production, cost and revenue, as well as performance review of existing multi-client arrangements and streamlining ongoing activities to the PIA.

“The assessment framework will require all existing licences and lessees to undergo a performance assessment audit of the operation of licences and leases based on a framework to be developed by lease and focussed on OPLs, OMLs, marginal fields multi-client arrangements.

“Evaluation is expected to cover the following: compliance with environmental requirements and with work programme commitments, compliance with revenue payment obligations and reporting obligations.

“Others are audit of operation systems and third-party provider activities and assessment of assignee roles and performance obligations.

“In the new dispensation, there will be a need for a team with representation from relevant departments to achieve performance schematic of existing licences and leases; identify oversight weakness, identify licensee and lessee centred failures in regulatory reporting requirements and other performance indices.

“Also in the new dispensation, there will be improved oversight mechanisms in line with the objective of the PIA and aspects of the new strategy as well as developing fresh Standard Operating Procedures (SOP) for acreage management and lease administration in line with the PIA.

“The team, which will be made up of a member each from exploration and acreage management: development and production; health, safety, environment and community; economic regulation and strategic planning and the legal secretary departments, is expected to submit a final report by August 30.”