DPR launches new upstream guidelines to promote efficiency, transparency

The Department of Petroleum Resources (DPR) has launched new upstream guidelines with the aim to promote efficiency, transparency and accountability in the sector.

Speaking at the Annual Rig & Vessel Stakeholders Regulatory Workshop in Lagos, on Thursday, the Director of DPR, Engineer Sarki Auwalu stated that the guidelines will guide operators on what is expected of them at every stage of their operations.

Represented by Engineer Enorense Amadasu, Deputy Director and Head of Upstream Division, Department of Petroleum Resources (DPR), he stated that “the essence of our meeting is to engage the industry and sensitize them on the programmes we have embarked upon for the past one year and also to seek more collaborations and for them to buy into our initiatives.

“The initiatives will promote efficiency in the industry, promote transparency and meet up with government aspirations by keying into government’s agenda on exploration and to achieve the three million barrels per day (bpd) target by year 2020 and to improve reserves to 40billion barrels from 37 billion barrels as at today.”

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He assured stakeholders that the agency has accurate data on what is produced daily all over the country.

“We, as a regulatory agency, can account for every molecule produced in this country, at the wellhead, at the flow stations and at the terminal. We have all devices to monitor and account for every hydrocarbon produced in the country today.

“Next year, we will organise production accounting workshop with all stakeholders including Nigeria Extractive Industries Transparency Initiative (NEITI), Federal Inland Revenue Service (FIRS), Oil Producers and Trade Section (OPTS), National Assembly and the media for all to understand how we account for every drop of oil produced and exported,” he said.

In response to concerns raised by stakeholders on the possibility of multi-layer taxes in the upstream sector, Amadasu said royalty is statutory and it is the first-line charge.

“The other costs people are talking about is the processing fee. The new amendments they are concerned about is a token because these are amendments that have not been done in the past 20 years. Thus government is working with all stakeholders to ensure it is reviewed.

“The cost is a minute aspect of the production cost we are talking about. It is less than 0.0001% of the production cost.

“That basically will not have much impact on the cost of production. But when we talk of cost reduction, we are talking of how you can improve on your logistics to reduce cost, how you can benchmark your cost with other industry related costs in the gulf of Guinea, your data acquisition cost and other big item costs.

“We have also been given a mandate as a regulatory agency to go out and work with sister agencies to reduce production cost by 5 per cent.

“In 2020, we will continue with government’s mandate to promote efficiency and accountability and transparency in the sector. We will ensure we grow production from 2.2mbpd to 3.0mbpd and sustain constant engagement with all stakeholders in the sector,” he said.