INTRODUCTION:

In line with today's era of digitalisation of systems and governance, the Department of Petroleum Resources (DPR) is set to commence the full digitalisation of 2,616 oil producing wells in Nigeria. This was made known during its recent workshop on Thursday, 18th July, 2019 for oil and gas operator's compliance officers in Lagos. This will be achieved through the National Production Monitoring System (NPMS) and compliance officers.

Note: Operating companies are required to submit two compliance officers dedicated to handling NPMS matters for sustainable/continuous uploading of production data. Consequently, where there is noncompliance, these compliance officers will be held liable/responsible.

OVERVIEW:

The NPMS is a web-based platform that provides rapid and efficient electronic data collection database and reporting system, which is envisaged to replace paper-based reporting.

Its implementation includes two pilot exercises where DPR collects real time data at source (one land-based terminal and one Floating Production Storage and Offloading (FPSO)).

PURPOSE:

The purpose is to ensure full compliance to production (in accordance with sections 43 and 52 of the Petroleum (Drilling and Production) Regulations 1969 (As Amended) and export data upload into DPR's official platform. Such platform would deepen the understanding of stakeholders of the operations and relevance of the NPMS to Nigeria. Also, efficiency and effectiveness of data management and planning purposes will be enhanced. Additionally, the pilot exercise ensured independent real time monitoring and improved the quality of surveillance which enabled national rollout to all other terminals during the project implementation phase. It also facilitates surveillance, production reporting and forecasting.

It is noteworthy that the process for digitalisation and data gathering commenced since 2016, hence the take off of the digitalisation process is a recorded milestone achievement.

EFFECT:

Thus, DPR has resolved and concluded plans to sanction oil and gas producers that fail to upload their production data into its official platform.

Also, no oil and gas company will produce oil and gas without first being on the DPR platform. This directive from DPR is in line with section 43 of the Drilling and Production Regulations 1969 (As Amended).

Additionally, in compliance with Section 38 of the said Regulations, every company must conduct the 'Maximum Efficient Rate (MER) Test' under the supervision of DPR before producing any oil well. The purposes of the test is to determine the optimal rate to produce a specific well.

The test is conducted twice a year, the first test is for the first half of the year which commences in September and closes on 30th November. Subsequently, a report gets submitted to DPR which has up till December to analyse the report and come up with a technical allowable rate assigned to each oil well.

On the other hand, the second test is for the second half of the year which commences from March to 31st May and DPR then analyses and issues the result on 1st July.

Consequently, if a company produces more than the allowable rate, such company will be penalised. The penalty entails relinquishing the over produced quantity to the government according to the law.

CONCLUSION:

In essence, compliance with this DPR's directive is key to sustainable production of oil and gas. Also, the stipulation of the allowable rate is a means to conserve Nigeria's oil and gas resources.

References:

1. DPR website https://www.dpr.gov.ng/fg-to-sanction-oil-firms-for-non-submission-of-daily-output/

2. NNN Website https://nnn.com.ng/2019/07/18/dpr-to-commence-full-digitalisation-of-2616-oil-producing-wells-official/

3. Vanguard website https://www.vanguardngr.com/2019/07/dpr-to-sanction-oil-gas-producers-without-data/