By Ejiofor Alike
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has urged oil and gas industry operators to collaborate with the industry regulators to ensure speedy approvals of Field Development Plans (FDPs) to attract investments to the oil and gas sector.
In his keynote address at a ‘Technical symposium on Field Development Plan (FDP) Approval Process’ organised in Lagos yesterday by the Society of Petroleum Engineers (SPE) Lagos Section 61, the minister noted that FDP is one of the fundamental criteria in the development of upstream exploration and production projects in Nigeria.
Kachikwu stated that it is important that the federal government acts quickly to evaluate and approve FDPs to ensure that the momentum of investors does not dip.
He added that some of the main issues that have resulted in delay of approvals are the inadequacy or incompleteness of plans that do not address all the project development issues.
Hence, as part of our seven Big Wins, we initiated the Nigerian Gas Flare Commercialisation Programme (NGFCP) as a solution. The purpose of the NGFCP is to eliminate wastage of gas, thereby stimulating economic growth, driving investments and providing jobs in the nation through the use of widely available innovative technologies. This initiative will provide an end-to-end solution that will positively impact the Nigerian economy. The Department of Petroleum Resources (DPR) will not approve any FDP, unless there is an end-to-end gas utilisation solution in place,” Kachikwu explained.
He said the federal government deemed it tactful to initiate the NGFCP, which would provide multiple options eliminating bottlenecks associated with FDP’s approval.
He added that another issue is that when the field would extend into neighbouring concessions or license areas and then unitisation of the asset becomes necessary.
“If we do not provide timely FDP approval, it will delayed production, revenue, profitability, economic development, job creations, growth and investments in the oil industry. Therefore timely FDP Approval is a win-win for both the government and the investors. In a sense, FDP is the roadmap for the development of any asset in the oil and gas sector. Therefore, to a large degree, it defines the success or otherwise of the field. This is the document the regulator of our oil and gas industry, DPR must approve before the commencement of activities in any oil field of our nation,” he added.
The minister said in Nigeria, the enabling law that gives legal backing to FDP approval is the Petroleum Drilling and Production Regulation of 1969.
“These laws are made pursuant to the powers conferred on the Minister of Petroleum Resources under Section 9 of the petroleum Act (CAP 350) laws of the Federation of Nigeria, 1990. The regulations put in statutory form -both the regulatory and operational details governing field exploration, development and production. It also prescribes the various fees, rents and royalties that shall be payable when the field is put on production. Furthermore, the laws of Nigeria prevent license holders from installing facilities or producing oil and gas without the approval of the Minister of Petroleum Resources or its delegate, DPR,” Kachikwu added
In his remark, Chairman, SPE Lagos Section 61, Mr Temitope Oshutuyi, noted that the topic is timely to address FDP challenges in the oil and gas sector.
“At the end of the session, we believed it would highlight steps to enable producing companies have their FDP approved on time,” he added.