DPR Effective Regulations impacts in the Nation’s Oil and Gas Industry

The Department of Petroleum Resources (DPR) came into existences as a queasy-independent department in the Ministry of Petroleum Resources in 1988 following an Act of excision of roles in the then Nigerian National Petroleum Corporation (NNPC) by the Military Government of the day.

In his paper titled How Regulations and Compliance Level is Preventing Losses in the Nation’s Oil and Gas Industry delivered by the Director, Department of Petroleum Resources, mr Mordecai Danteni Baba Ladan at One Day Conference On Anti-Corruption and Prevention of Revenue Linkages in Nigeria’s Maritime/Oil Industries organized by Nigerian House Committee on Independent Corrupt Practices and Other Related Offences Commission (ICPC) in collaboration with Association of Maritime Journalists of Nigeria (AMJON) over the week.

The event with Theme: The Danger of Revenue Leakage to the Nigeria Economy was held in Lagos.

The Director, DPR was represented at the event by Kingston E Chikwendu, the Chief Legal Officer of the Resources stated that the emergence of the DPR as an executive agency of the federal government seized with the responsibility of supervising the oil and gas industry.

Landan noted that the DPR through effective policy implementation and enforcement of petroleum laws and regulations function have prevented some losses in Nigeria oil and gas industry since its establishment.

He highlighted the roles of the DPR as entails the Director, Department of Petroleum Resources as from time to time provides experts technical and non-technical advice to the Minister of Petroleum Resources and the Federal Government on policies relating to the petroleum industry as well as undertake the implementation of such policy decisions.

“Policy issues which the Department implements cuts across the downstream, the midstream and the upstream sectors of the petroleum industry.”

The director disclosed that the DPR plays a critical role in seeing to the implementation of the federal government policies on the elimination of gas flaring and raising of the nation’s oil reserve to 40 billion barrels by 2020.

The Conference was an eyes opener for many stakeholders as it was revealed that the DPR operates a Cashless Revenue Collection System, which all remittances of fiscal payments are made directly to designated federation account for each revenues and also undertakes two types of revenue functions. They are revenues generations and collections.

Under Revenue Generation are:

1) The royalties on crude oil and gas

2) Annual rental fees on OPLs and OMLs

3) Miscellaneous oil revenue including application fees and license fees for the various licenses, permits, authorizations and approvals issued by the DPR

4) Signatures bonus payments generated from the grant of OPLs and OMLs

5) Assignment fees, premiums and renewal bonuses upon the renewal of OPLs and OMLs

6) As well as fees generated from data marketing etc

7) Gas flare penalty

8) Other fines and monetary fines and

Under Revenue Collections are:

  • Licenses undertakes a self-assessment of royalty and flare penalty, make payments to designated accounts within on days of production and advice the Department through the bank swift copies of all payments made.
  • The Department computes royalty and gas flare penalty payable on a monthly and annually basis for concession rentals.
  • The Department conducts comprehensive quarterly and annual reconciliation of revenue payments to ensure remittance of all fiscal payments due to the FGN.

In response to some questions, mr Landan said the DPR is responsible for all transactions of both exports and imports of oil and gas industry adding that the department keeps figures of volume recorded while NNPC accounts for cash as a commercial for the government.

He also disclosed that for purpose accuracy record of transactions if the measurement is suspected at the port of loading, the DPR staffs have to follow the cargo to the port of discharge for confirmation of the volume carried.


The Caption Photo: The Director, Department of Petroleum Resources, mr Mordecai Danteni Baba Ladan

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