Apparently showcasing its new policy framework for the oil industry, the Department of Petroleum Resources (DPR), saddled with the responsibility to regulate the oil industry, had a Strategic Stakeholders’ Engagement Meeting with oil and gas industry operators.
Representing the Director of DPR, Modecai Dante Baba Ladan, Deputy Director, Pat Maseli, disclosed that Value Monitoring and Benchmarking (VMB), a digital networking system is being unraveled to develop asset management which will not impede progress and development in the industry.
Maseli stated further “Our resolve was to provide a robust digital platform that has the capacity to securely accommodate the enormous asset development of the government and operational data for cost, reserves, technical monthly production by the upstream among others. These have been in system including Application, Programming and Interface (API) for a seamless of this data by the operating companies and other stakeholders.
According to Maseli, the platform is standardized and it is ISO 19 008 certified by 2016 standard course coded system and consistently chat of account for meeting global relevance. Notable among the success is the level of engagement and interactions with key industry stakeholders including sister agencies like NNPC, NAPIMS, FIRS, NEITI including operating companies.
The DPR Director expressed concern on the notion that the regulator is only involved in technical issues in work program and presentations while details on cost information are relegated. This has led to lack of detailed information on cost of project and operations to the Department.
In addition, DPR is enabled to effect reforms in the oil industry by provisions of Petroleum Act.
Maseli explained that the highlight of the Forum was to present the VMB digital platform to industry stakeholders and solicits their support. Although there are some challenges, the Department has put some measures to ensure that companies are timely and adequately attended to when needed. DPR will further engage operators by company to company basis to provide adequate attention to each company to ensure they register on the platform.
Besides, companies will provide detailed information including a contact person for registration in order to interface with DPR. Companies are also expected to upload their budget and cost data including yearly reserve and monthly technical production data by well stream on the platform from 2010 as the base year.
She noted that VMB digital platform is of immense benefit not just for DPR, but various operators.
In a similar development, Folasade Odunuga, an executive of DPR, explained that after companies submitted their data to DPR, a pilot project was launched into the oil industry. She disclosed that VMB was initiated after an interactive and stakeholder meeting in Lagos. She said the tool is a regulatory framework to scale up best regulatory functions, track, optimize and benchmark cost with performance. Hence, the tool will transparently standardized the industry to stimulate competiveness for sustaining growth, development and maximized value.
She posited that the tool will not only maximize government take but that of the company as well, “Because if you have a very reliable comparative cost, the tool within your terrain of operation, you will always know whether your price or cost are above board or they are within limit.” DPR is a technical regulator and part of its mandate is to deliver the take of Federal Government of Nigeria. The regulatory agency derives its power in carrying out its assignment from the amended 1969 Petroleum Act. She pointed out that the VMB tool will enable the unit technical cost not only for DPR to be on top of the situation and know it in terms of regulation, but to be a transparent measure that stakeholders can attest since Unit technical cost of companies differs.
The objectives of the tool is to promote transparency, viability through cost evaluation and benchmarking of asset development with operations of data. The tool will access and benchmark fiscal terms impact on asset development, operations as a guide for making decision for future development. It will stimulate industry competitiveness and investment through analysis and evaluation for producing and non-producing asset for viability and network purposes.
It also determines investment and underscores common cost implication. VMB will optimize value creation and addition to the economy, it gives investment confidence and profitability. Everything pertaining to the industry will be known to all stakeholders.
The requirements of VMB tools for operators include: cost data, oil and gas reserve, oil and gas technical production and five to ten years strategic work plan. These will enable the tool to work effectively.
Odunuga also emphasized on Fiscal Price Administration System (FisPAS), which is a tool that is designed to manage and administer product royalty, gas sales royalty, gas flare royalty and concession rental. FisPas will be used for asset re-assignment, fiscal revenue due to the federation. DPR can monitor and administer the process effectively. It will be used to know the exact due for the Federal Government which is opened to third party as well.
The system will be used to submit data, make payment and interact with the regulator timely. FisPas will allow oil companies to submit payment conveniently without bothering to send data to DPR, “It is a dynamic tool that is required to put fiscal regime in a very transparent and accountable manner.”
She appealed to stakeholders to support the two tools that have been introduced by DPR to the oil industry. It will assist the regulatory agency and makes its job easy, transparent and accountable to the Federal Government.
Odunuga also unveiled DPR’s record book known as Nigerian Oil and Gas Industry Annual Report (NOGAIR) to oil industry operators. NOGAIR is usually distributed to operators and stakeholders in the oil industry, but at present, it is in DPR’s website making it easy to access. She said “NOGAIR will enhance transparency through the provision of accurate and reliable statistics on the performance of Nigerian oil and gas industry.” It will help end users to appreciate Nigeria’s oil and gas industry in the changing technology of global oil and gas industry. It contains critical information to the public on the activities of the industry in the year under review including other years that will be updated going forward. NOGAIR will enable stakeholders to make business decisions, project into business opportunities based on accurate data and enhance ease of doing business in the country.