To Curtail Oil Assets Vandalism, NMDPRA Begins Consultations on Host Communities Regulation

•Says full licensing for Dangote refinery ready soon

Emmanuel Addeh in Abuja

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday commenced stakeholders’ consultation on the contentious Midstream Petroleum Host Community Development Trust Regulation, saying that it will help curb oil and gas assets vandalism.

Speaking at the event which held in Abuja, the Chief Executive of the Authority, Mr Farouk Ahmed, also explained that the Dangote refinery will soon get its license to begin full operation.

Represented by the NMDPRA’s Executive Director, Distribution Systems, Storage & Retailing Infrastructure, Ogbugo Ukoha, Ahmed stated that the organisation was working quietly to ensure that the pace of licensing in the sector is ramped up.

Insisting that the Authority does not get enough accolades for the high level work it puts into churning out regulations as demanded by the Petroleum Industry Act (PIA), Ahmed stressed that host communities issues remain very emotional, reason the stakeholders’ meeting was necessary.

“We do not receive sufficient acknowledgement for the drafting of the regulations, just like we quietly license facilities and we really do not go out there and say this is the work we put in to license.

“The PIA has been very clear about the process for regulation and it has provided that consultation must be part of that process and that the public hearing must be held with the stakeholders to discuss and review proposed draft regulations.

“And this aligns with the Authority’s approach to the work that we do, by being very collaborative. And so today’s programme, just like every other stakeholder engagement, is to provide a platform to cross-fertilise ideas. And I dare say that the Hostcom concept is one of those that can be very highly debatable and sometimes very heated for obvious reasons.

“Many of the feedbacks, the most emotional ones, have always revolved around the issue of what should qualify as the applicability of Hostcom to either the midstream and the downstream. Some hold the view that Hostcom is a concept for the upstream sector of this industry. But I just want to set the right tone by referencing what I would call the spirit of the PIA.

“When we argue and say it’s counterfactual and insist that Hostcom should apply to only extraction industries, we’re posing the question, what of the emissions? What are the effects? Do they not impact on the community?

“When you read the relevant sections of the PIA,  the ones that precede Section 2.40, do you not get the sense that there are industry facilities in particular that are more impactful, even more than the wellheads? I don’t know which upstream facility will be much more than, in terms of scope and impact, more than the NLNG or the Dangote refinery that’s coming on stream,” he argued.

He stated that the NMDPRA has issued thousands of licences for various segments of the operations of the midstream and downstream, stressing that both sub-segments of the oil and gas sector have wide areas of reach.

He added: And so we work with these operators, and we issue licenses. Within the midstream space, we have about three refineries with valid licenses. We are hand-holding the Dangote refinery through their pre-commissioning, and sooner or later they will have a full commissioning and a valid license to also do that.

“In the gas processing facilities within the midstream, there are about 15 of them with valid licenses, and much more are under processing. If you go to the downstream, in the gas space in the downstream, there are facilities more than 1,195 facilities that hold valid NMDPRA licenses. More than 176 operators hold gas imports and off-take permits.

“In the liquids licensing side of the downstream, there are 130 depots with valid licenses. Coastal vessels, more than 69 have valid licenses as of today. And in the retail outlets, we have 9,464 licensed retail outlets with valid licenses as of 10 a.m. today,” he explained.

Also speaking, the Secretary and Legal Adviser, NMDPRA, Dr Joseph Tolorunse, who gave an overview of the regulation, said it shall apply only to the midstream petroleum host communities and a holder of a license that is engaged in the midstream petroleum operations.

He stated that the regulation will outline the procedure for establishment and administration of the Trust and the Fund for the midstream petroleum host communities.

In addition , he stressed that it will also establish parameters to safeguard the trust fund as well  as establish grievance resolution mechanism for the settlement of disputes between the host communities and licensees.

“This regulation is expected to promote social and economic benefits from petroleum operations to the host communities, enhance peaceful and harmonious co-existence between the licensees, lessees and the host communities and curtail pipeline vandalism and increase oil production etc,” he stressed.

In his remarks, the House of Representatives Chairman on Host Communities, Dumnamene Dekor,  said the committee was set up to address most of the long-standing challenges in the host communities.

He said that these were issues of deprivation, explaining that the wellbeing of host communities was essential to Nigeria’s collective desire for a progressive and prosperous nation.

“The oil and gas sector constitutes over 60 per cent of the total government revenue, and about 90 per cent of the total export earnings of this country.

“Yet, the country has failed to effectively deliver benefits of the resource exploitation of host communities for nearly 70 years. This failure has had enormous consequences on the development of the oil and gas and overall economy of this country,” he lamented.