As part of efforts to grow the country’s oil production and address funding setbacks confronting marginal field investors, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has concluded arrangments for a production- based lending engagement that will help operators source needed capital to commence full field development towards hitting first oil.
This comes as some succesful investors under the 2020 Marginal Field Bid Round licences are finding it difficult to source funding for the development of the various assets.
NUPRC Commission Chief Executive(CCE), Mr.Gbenga Komolafe, who dropped the hint in Abuja yesterday, said the engagement which is planned to commence soon will be between the Commission, Petroleum Production Licence (PPL) awardees, exploration and production (E&P) service providers and Nigerian Banks…..continue Reading
He added that the intervention by NUPRC was to provide platforms for strategic partnership/alliance between the awardees and the service providers for Well Re-entry and drilling services. The arrangement is to be offered on service fee recoverable by the service providers from production to be attached.
He added that the Commission has already concluded plans to organise an E&P International Financing Roadshow in Abuja in the coming weeks for financiers, investment bankers, private equities, and multi-lateral institutional investors. According to him, the initiative is to showcase the high value quick win opportunities available to investors in the recent Petroleum Prospecting License(PPL) awards, the on-going National Gas Flare Commercialization Programme, as well as the on-going Mini-bid awards.
He explained that the strategy will equally ease the challenges thrown up by the initial corporate governance issues that arose before the inauguration of the Petroleum Industry Act (2021), saying the Commission has developed a Corporate Governance Framework for upstream petroleum operations. The framework, he stressed is currently at an advanced stage of internal review and stakeholder engagements required for its finalization.
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This, he said, is to enhance sustainability, environmental and corporate governance requirements and to facilitate capital attraction by investors for the optimal and efficient development of the PPLs and other assets.
To facilitate dynamic data gathering and accelerate the achievement of ‘first oil’, he stated that the Commission initiated the revision of the subsisting Extended Well Test (EWT) Guideline to enhance early cash flow and speed up the journey to first oil. The strategy has already yielded positive results with 16 companies submitting Field Development Plan (FDP), twoalready commencing unitization processes, six re-entries and twohaving gone through the EWT.
‘‘However, the Commission is not unmindful of the protracted dispute amongst some of the awardees triggered by shareholder disagreements and/or misunderstanding. We are collaboratively engaging the parties and mediating to facilitate early closure and diligent progression towards achieving the expected regulatory milestones, including value creation and hitting first oil.
Since the award of forty-seven (47) PPLs to solely Nigerian entities in June 2022, the Commission has made concerted efforts within the stipulations of the law, to provide statutory guidance and support towards the progression of the assets to field development.
Steps taken include the convocation of Regulatory Induction Programme for PPL awardees to enable them have the requisite understanding of the statutory protocols from the award to first oil; and a week-long tripartite engagement in Lagos for all awardees and initial asset owners in December last year, with about 30 entities in attendance.
During that event, both the awardees and former asset owners resolved all impediments to the smooth take over by the awardees and operation to first oil. That event set the stage for engagements on issues required to fulfil initial work programme obligations.
Areas that were presented and rigorously deliberated upon include Royalty and Tax administration, Data Exchange Protocol and Leasing requirements, Field Development Plan under the PIA(2021), Permitting Processes for Drilling and Re-entry Applications, Production Accounting, Facilities Deployment, and Host Communities’ Development.’’….continue Reading