NUPRC Sets Up Alternative Dispute Resolution Body, Says N200bn Attracted for Host Communities Devt

•Taps Falana, Osahor, 25 others as ADRC members  

•Komolafe laments Nigeria’s low capex to oil reserve ratio

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday set up an alternative dispute resolution mechanism to handle cases of disagreements involving upstream operators.

The Chief Executive Officer of the commission, Mr. Gbenga Komolafe, who spoke at the event in Lagos, disclosed that the commission also facilitated and attracted funds totalling about N200 billion for the development of oil and gas host communities in the country.

He further swore in 27 members of the ‘Body of Neutrals’ for the NUPRC’s Alternative Dispute Resolution Centre (ADRC), including human rights lawyer, Mr. Femi Falana and a former Director of the defunct Department of Petroleum Resources (DPR)/Chairman of Energia Nigeria Limited, Mr. George Osahor.

Other members of the ADRC body sworn in by Komolafe were:  Mr. Osten Olorunsola, Mr. Dozie Inechukwu, Dr Edefe Ojomo, Mrs Olayinka Kolade, Mr. Omoniyi Opeyemi, Adeyemi Akinsanya, Dapo Akinosun, Dr Nike Esan, and Achere Cole.

Also sworn in were: Adeyinka Ololade, Ojukwu Chiakaasolu,  Daere Akobo, Justice Andrew Alaba, Chinenye Onyemaizu, Isaiah Bozimo, Dr David Agbu, Abdullah Omaki, Olajumoke Adio,  Owoeye Ibukun,  Shola Oshodi-John, Chidi Martins, Babatunde Fagbohunlu, Oghogho Makinde, Justice Babatunde Adejumo and Deji Morakinyo.

On the host oil community funding, Komolafe explained that it comprised N60 billion and another $100 million, adding that it amounted to N200 billion when calculated against the prevailing foreign exchange rate.

He also lamented Nigeria’s low reserve to capital expenditure (Capex) ratio despite the country’s over 37 billion barrels oil and 209 trillion cubic feet (TCF) deposits.

Komolafe explained that the N200 billion already attracted for host community development was achieved through the implementation of the Petroleum Industry Act (PIA).

He stated: We all are aware that as a nation that is well endowed with huge hydrocarbon resources of over 37 billion barrels of oil and 209tcf of gas, that we suffer at a very low reserve to capex ratio in the country.

“And one of the reasons that have led to that is the menace of crude oil theft aside very hostile operating environment. Of course, the PIA under Section 235 provides robustly the dealing with the challenges of hostile communal environment and of course, that provision speaks about inclusiveness.

“Now, for us as a commission, we’ve made efforts in achieving effective implementation of the robust provisions of the PIA which is a very laudable provision. As at today, we have facilitated about N60 billion.

“We’ve created over $100 million. And these funds are meant to add value to the host communities, to facilitate conducive operating environment for the operators so that we can achieve the intended optimisation of our hydrocarbon endowment in the nation”.

He said the intent of the commission’s ADRC was to look for a much peaceful, faster and cheaper way of resolving disputes in the oil and gas industry, particularly issues relating to host communities, to engender a conducive operating environment for operators.

The commission chief executive said the idea was to help to improve Nigeria’s oil and gas production and ultimately lead to increased revenue to the federation’s account.

Komolafe said however that while the funds had been facilitated and available for host communities’ development, litigations arising from host community cases being fuelled by litigious actors in the communities had contributed in delaying the disbursement and utilisation of the funds to add value to the communities as intended by the PIA.

He noted that by going the routes of the mainstream judicial process with its high cost and long trial process, some host community actors often secure court injunctions to stall the utilisation of funds.

“As I speak, you find out that these funds are there but oftentimes, because of the litigious actors in these host communities, there are delays in disbursing them.

“Because of the crisis, some of them will go to court, place injunction and we have a barrage of all these issues. And we know that going through the mainstream judicial process takes time apart from cost.

“So in effect, the intended value addition or inclusiveness that we seek to drive in the commission are not impacting as intended. So that becomes an issue,” he explained.

Notwithstanding the challenges, he said NUPRC was doing everything to add value to the communities through the PIA provisions.

He said the commission would continue  to facilitate inclusiveness and peaceful operating environment to enable operators operate in a way that leads to achieving the targeted optimal oil and gas production and impact positively on the federation’s revenue.

He restated that the unwarranted crisis among the host community actors often limits the laudable initiative of the PIA.

Speaking further, Komolafe said the inauguration of the alternative dispute resolution body marked a significant milestone in the commission’s role as the regulator of the Nigerian upstream petroleum sector.

He maintained that the establishment of the body was not only the culmination of extensive planning and dedication but also the commencement of a transformative chapter in the realm of dispute resolution.

“In an increasingly complex and interconnected world, the demand for effective and efficient dispute resolution has never been more critical.

“While traditional litigation remains necessary and important, it is often accompanied by inherent delays, high costs, and adversarial postures that can exacerbate conflicts and strain relationships, as seen in numerous protracted legal battles between producers and host communities.

“These challenges underscore the inefficiencies of traditional litigation and the immense financial burdens and prolonged suffering it imposes on the individuals and communities involved,” he said.

He explained that the intent of the commission’s ADRC was to look for a much peaceful, faster and cheaper way of resolving disputes in the oil and gas industry, particularly issues relating to host communities, to engender a conducive operating environment for operators.

Besides, Komolafe described the members of the new group as esteemed persons who are  professionals and embody the core values of impartiality, expertise, professionalism, and dedication.

He stated that the body comprises eminent professionals with expert knowledge and/or technical experience in the oil and gas industry, including lawyers, retired judges, oil and gas industry experts, and other subject matter experts.