NUPRC Introduces Seven New Regulations for Nigeria’s Oil and Gas Sector

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a set of seven new regulations, aiming to establish a regulatory framework that ensures efficiency, predictability, clarity, and effectiveness within Nigeria's oil and gas industry.

On Thursday 25th May,2023, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) witnessed the signing and issuance of the new regulations at its headquarters.

The Chief Executive of the Commission, Engr. Gbenga Komolafe, officiated the ceremony, with the presence of Dr. Orji Ogonnaya Orji, the Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI)

The following are the seven newly introduced regulations:

• The Nigeria Upstream Petroleum Measurement Regulations, 2023

Aim to address the existing gaps in metering practices within upstream petroleum operations. These regulations will promote the rapid deployment of hydrocarbon measurement metering devices, foster the development of independent and competitive meters, and attract private investment in metering services.

They will also establish guidelines for the measurement of petroleum production, ensuring transparent and accurate measurement of crude oil and gas. This will serve as the basis for calculating oil and gas revenues for the government. Additionally, the regulations define the requirements for the design, fabrication, manufacturing, testing, calibration, operation, and maintenance of metering equipment in the upstream sector.

These regulations mark a significant departure from the historical trajectory of the Nigeria upstream sector since the discovery of oil in 1956 and the commencement of production in 1958.

• The 2023 Regulations on Production Curtailment and Domestic Crude Oil Supply Obligation

Aim to establish comprehensive guidelines governing the curtailment of production and the utilization of petroleum with regards to both export and domestic obligations for crude oil supply. These regulations are based on the provisions outlined in sections 8(c) and 109 of the Act.

• The 2023 Regulations on Frontier Basins Exploration Fund Administration

Aim to establish overarching guidelines for the implementation of the Commission's duties regarding frontier basins in Nigeria. These regulations, which align with section 9 of the Act, outline the Commission's responsibilities and govern the administration of the Frontier Exploration Fund.

The primary objective is to promote and attract investment in Nigeria's frontier basins.

• The 2023 Regulations on Nigeria Upstream Decommissioning and Abandonment

Aim to guarantee that decommissioning and abandonment processes adhere to recognized international standards in the petroleum industry. These regulations also provide the structure for creating and managing a Decommissioning and Abandonment Fund, ensuring proper administration and oversight of related activities.

• The 2023 Regulations on Significant Crude Oil and Gas Discoveries

Aim to maximize the efficient utilization of petroleum resources found within Petroleum Prospecting Licenses granted under the Act. These regulations ensure that licensees retain areas of substantial crude oil and gas discoveries for a specified period, as outlined in section 78 of the Act, allowing for proper exploration and development of these valuable resources.

• The 2023 Regulations on Gas Flaring, Venting, and Methane Emission (Prevention of Waste and Pollution)

Aim to achieve several objectives. Firstly, these regulations aim to mitigate the environmental and social consequences linked to gas flaring, venting of natural gas, and the release of fugitive methane emissions into the atmosphere.

Secondly, they aim to safeguard and preserve the environment, preventing the unnecessary wastage of natural resources. Additionally, these regulations strive to facilitate Nigeria's energy transition by promoting the efficient use of gas resources.

Moreover, they seek to generate social and economic benefits from gas flaring and venting activities. Lastly, the regulations outline the procedures for the Commission to exercise its rights in acquiring gas at flare points, in compliance with the Act and other applicable laws.

The Nigeria Upstream Petroleum Unitization Regulations, 2023

Set forth guidelines, principles, and protocols governing the execution of unitization in the extraction of oil and gas from a petroleum reservoir that spans beyond the confines of a specific license or lease area and extends into an area covered by another license or lease.

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