By Chisaa Okoye
In recent times, the Department of Petroleum Resources, headed by Sarki Auwalu has been churning out news content that media organisations spread without first verifying their accuracies.
What is even more worrisome is the rate at which Auwalu, who assumed office as Director of DPR in 2019 sets unrealistic targets, often contradicting himself and creating confusion in the oil industry.
Penultimate Monday, the DPR Director announced that the federal government “is to increase Nigeria’s oil reserves from 36.91 billion barrels to 50 billion barrels in the short to medium term.”
He also said government was targeting to increase Nigeria’s proven gas reserves from 206.53 trillion cubic feet to 250TCF.”
Auwalu’s 50 billion barrels reserves target, the latest in the series, was contained in a statement by his media aide, Paul Osu.
It came barely one month after he announced at the Second Quarter, 2021 Business Dinner of the Petroleum Club, in July that the “federal government is planning to increase Nigeria’s oil reserves by 40 billion barrels and gas reserves to 220TCF by 2030.”
In October 13, 2020, the director had announced that Nigeria “is now aiming to increase its oil reserves, including condensates, substantially to 40 billion by 2025.
Recall that the DPR boss in July, projected a new pump price of N1000 per litre for petrol when he spoke at an event on the ‘Future of the Nigerian Petroleum Industry’.
He made the unrealistic projection barely one month after Mele Kyari, the GMD of NNPC stated that the cost of petrol per litre should be N256 without government subsidies.
Auwalu, who received knocks for the unrealistic projection, was forced to retract the statement.
Oil and gas industry players are utterly baffled by this embarrassing situation and have expressed concerns that the industry is fast becoming synonymous with unrealistic targets.
For a director of an agency that is saddled with the responsibility of regulating the oil industry to be churning out figures and dates that are often at variance, calls for serious concern.
“In October 2020, he set 40 billion barrels reserves target to be achieved in 2025; In July, he said 40 billion barrels would be attained in 2030 and in August, he set 50 billion barrels reserves target to be achieved in the short to medium term without given details of how the target would be met. This is disgusting, said an oil industry operator.
Analysts have however attributed this to the agency’s desperate moves to remain relevant in the post PIB era.
Recall that the Petroleum Industrial Bill (PIB), which was passed by the National Assembly on July 1, proposes the establishment of two regulators to oversee the upstream and downstream segments of the Nigeria’s oil and industry as against the current single-regulator model, where the DPR is the only agency that regulates activities in the petroleum industry.
If the bill is signed into law as it were, the DPR would be replaced by two regulatory agencies – the Nigerian Upstream Regulatory Commission (NURC) and the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA).
The upstream segment would be overseen by the NURC while the midstream and downstream segments would be regulated by the NMDPRA.
Ever since the passage of the bill, the DPR has embarked on intense lobby to get the relevant authorities jettison the idea of two regulators for oil and gas industry.
In recent times, the media has been awash with sponsored articles believed to have emanated from the DPR, suggesting that the creation of two regulators for the oil industry is unnecessary, a waste of Nigeria’s resources and could result in disunity among the regulators.
But stakeholders in the industry welcomed the creation of two regulators given that the DPR, an agency responsible for regulating the sector, has failed in its responsibility to ensure that rules and procedures are complied with by players in the oil and sector.
This they said, is evident in its mishandling of award of oil and gas operating licences, issuance of permit to establish petrol stations and gas plants to firms, monitoring of petroleum products importation as well as its inability to check fraudulent practices among oil marketers.
Checks reveal that companies that lacked adequate manpower and skills bribed DPR officials to obtain oil block permits. Similarly DPR officials allegedly received bribe from firms and issued them licences to establish gas plants and fuel stations near residential areas without consideration to environmental hazards.
One of DPR’s core mandates is to minimize and control pollution from the various aspects of petroleum operations, but it has failed in this regard.
A recent report on environmental risk management in Nigeria’s oil and gas sector titled “Review of the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria found that “the regulatory oversight of the Nigerian oil industry has been extremely weak and does not currently align with international best practices on oil sector transparency and accountability.”
The passage of the PIB, which guarantees a stable fiscal environment for the petroleum industry will no doubt spur activities in the oil and gas sector.
The DPR, as it were is too weak to handle the challenges that will come with this.
This is why the emergence of two different regulatory bodies for the upstream and downstream segments of the oil and gas industry is a very welcome development.