The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said the Petroleum Industry Act, PIA, had introduced incentives to grow reserves.
The commission also said that the aim of the Act was to increase Nigeria’s daily production toward attaining 40 billion barrels and 220TCF of oil and gas reserves.
It said the incentives would also enable the country attain production target of three million barrel per day (3mb/d).
Gbenga Komolafe, the Commission Chief Executive, CCE, NUPRC, spoke on Wednesday in Abuja at the ongoing 21st Nigerian Oil and Gas Conference and Exhibition, tagged “Funding the Nigerian Energy Mix for Sustainable Economic Growth”.
Mr Komolafe spoke on “Providing Regulatory Oversight in the Petroleum Industry Act (PIA) Era”.
He said that Nigerians craved a legal regulatory framework for the oil and gas industry, one robust enough to effectively regulate the sector for optimum productivity and efficiency.
Mr Komolafe thanked President Muhammadu Buhari and the Ninth Assembly for the PIA passage.
He said it provided for administrative, institutional governance, attractive fiscal regimes, mechanisms for improved environment and peaceful co-existence between operators and host communities.
According to him the act empowers the commission on technical and commercial regulation of the Upstream Petroleum activities in a manner to ensure sustainable hydrocarbon exploration and production at optimum cost.
He said the act also dealt on issues of environmental remediation, decommissioning, and abandonment, and setting up of Host Community Development Trust, HCDT.
Mr Komolafe said that the sixth schedule of the act provided for production allowance wherein performance in terms of production milestone was rewarded.
He said it introduced a mandatory Decommissioning and Abandonment Fund prescribed under Section 232 and 233, adoption of Grid System for Acreages under Section 69, HCDT under Chapter three which replaced MOUs and GMOUs.
These, he said were aimed at achieving operational efficiency, higher productivity, cost optimisation, cleaner and safe upstream environment.
According to him, the PIA 2021 under Chapter four and the seventh schedule provided attractive fiscal terms for the Petroleum Industry which included Progressive royalty rates compared to pre-PIA royalty rates for all terrains.
Others, he included are Reduced Royalties (to 2.5 per cent) for gas produced and utilised locally, introduction of hydrocarbon tax and company income tax that are cumulatively lower than Petroleum Profit Tax Pre-PIA
“Zero hydrocarbon tax for deep offshore operations, consolidated taxation on lease- and company-basis and other fiscal incentives.
“These sweeping reforms are geared toward creating additional opportunities for new investments and higher revenue for both government and investors,’’ he said.