Thread by @Jarushub

Understanding Oil & Gas Industry in Nigeria VII

Regulators

1. Department of Petroleum Resources (DPR)

DPR is to oil & gas industry what CBN is to banking. It's the overall regulator of the oil & gas industry. There is virtually no major activity you want to carry out without

...needing DPR approval - whether drilling plan (upstream) or gas plant construction (midstream) or building filling station (downstream). DPR is also in charge of licensing and award of oil blocks (on behalf of the President and Minister of Petroleum). DPR is also in charge of

collection of certain monies payable to govt by oil & gas companies, including signature bonus (payment for award of oil&gas licence), to royalty (payment for extracting oil or gas from "govt land/water"), to all manner of approval fees. While signature bonus is payable once

and does not depend on the success of the field, royalty is payable based on production of oil and gas and it is continuous as long as you produce. It is a certain % of your production (for gas, % of sales)

DPR is also like the chief compliance officer of the oil & gas industry

It makes sure all health, safety and environment standards are complied with. They are involved in virtually every project and operation of oil companies to make sure the standards are followed. You also submit Environmental Impact Assessment (EIA) to them.

DPR is also the Chief Data Officer of the oil and gas industry. It keeps all data on the industry - from reserves to production.

DPR is also the chief adviser to government on the industry. Since it is closer to the industry, it knows more and advises govt on policies.

The Head of DPR is called Director, because DPR is actually a dept under Ministry of Petroleum, but their staff have different employment conditions from ministry because you don't want them to go into meeting with say Chevron and spend the whole 3 hours looking at the wrist ..

..watch of Chevron staff you are meant to regulate 😊. Okay, that's a joke, but as the regulator of the sector that makes the most money to the FGN, they need some special terms from other government jobs.

As the Chief Regulator of the industry, The DPR DIrector is actually

a very top position, perhaps the #1 person in the oil and gas industry (after President and Petroleum Minister), but holders of the position are less known (and less flamboyant) like NNPC GMD or CBN governor.

Let's stop here. We will treat other regulators in subsequent threads