Functions of DPR and other details

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DPR is the popular acronym for the Department of Petroleum Resources. This is a department under the Nigerian Federal Ministry of Petroleum Resource (FMPR), responsible for matters dealing with exploration and importation of petroleum products. The department is in charge of health, safety and environmental regulations in the trade of petroleum products in Nigeria.

The department also controls the up and downstream in Nigeria petroleum industry. Through the National Production Monitoring Systems (NIPMS), the department is able to monitor payments to the federal government through royalties, rents and penalties from all organizations dealing in petroleum in Nigeria.

Functions of DPR and other details

Functions of DPR

The department is headed by The Director of Petroleum Resources who currently (2016) is Mr Mordecai Ladan.

Brief History

At first, issues related to petroleum used to be handled by the Hydrocarbon Section of the Ministry of Lagos Affairs, and this unit reported directly to the Governor-General.

The responsibility of the unit included keeping records on petroleum exploration and importation of petroleum products. It also enforced regulations and safety rules on the importation and distribution of petroleum products. However, as the activities of the petroleum industry increased, the unit was upgraded to a Petroleum Division under the Ministry of Mines and Power.

However, in 1971, a new body was formed to take charge of commercial and operational activities in the oil industry and given jurisdiction under the federal government. The Department of petroleum resources continued to supervise the activities of the industry

In 1975, the department was upgraded to a ministry and was called the Ministry of Petroleum and Energy. It was later renamed the Ministry of Petroleum Resources.

Under decree 33 of 1977, the Ministry of Petroleum Resources was merged with the Nigerian National Oil Corporation (NNOC) to form the Nigerian National Petroleum Corporation (NNPC). This was done as a means to manage the problem of scarce manpower in the oil industry at the time. The decree also established the petroleum industry as a part of the NNPC. The NNPC was also entrusted with regulating the industry.

In 1985, The Ministry of Petroleum Resources was re-established although the petroleum inspectorate remained a part of the Nigerian National Petroleum Corporation. This was until March 1988 when the NNPC was reorganised. This meant that the Petroleum Inspectorate was removed from the Nigerian National Petroleum Corporation and moved to the Ministry of Petroleum Resources. It was to be the technical arm and also to be called the DPR (Department of Petroleum Resources)

Functions of the DPR

The DPR is enabled by the constitution to ensure compliance to the petroleum regulations, guidelines and laws in the Oil and gas industry. This includes supervising all operations at drilling sites, oil wells, platforms and flow stations, refineries, pump stations, export terminals, retail outlets and any other location where petroleum is traded or stored. This also includes all pipelines carrying petroleum products, natural gas and crude oil. Other functions of the Department are:

  • Overseeing all operations of the petroleum industry carried out under licenses or leases within the country.
  • Keeping close watch over all activities of the industry including those related to Flare down and Domestic Gas Supply Obligations to make sure they are in compliance with the nation’s laws and goals.
  • Supervising all Petroleum Industry operations being carried out under licences and leases within the country.
  • Ensuring that health, safety & environment regulations conform to national and international standards.
  • Keeping records operations of the petroleum industry operations, particularly on matters relating to petroleum reserves, production/exports, licences and leases.
  • Consultancy services to the government and other relevant government agencies or organizations on technical matters and public policies that may have an impact on the operations and activities of the petroleum industry.
  • Processing industry applications for leases, licences and permits required for operation related to the oil and gas industry.
  • Ensure prompt and accurate payments of rents, royalties and other revenues due to the government.
  • Keeping up and administering the National Data Repository (NDR)

Operations of the Department of Petroleum Resources   

1. UPSTREAM

Roles of the DPR upstream

  • Regulation of all activities in the Oil and Gas industry Oil and Gas activities
  • Conservation of Nigeria’s Hydrocarbon Resources
  • Ensure firm adherence to Health, Safety & Environment (HSE) Standards in petroleum operations
  • Maximize government take in Oil and Gas activities
  • Keeping up and administering the National Data Repository (NDR)
  • Administer areas, portions and concessions used for Oil and Gas operations
  • Implement government policies on matters related to Upstream Oil and Gas.

2. DOWNSTREAM

These are activities which take place between the transfer of crude oil on the field and loading at the export terminal even down to the use of the oil by the consumer.

Downstream includes the ocean transportation of crude oil, supply and trading, refining, distribution and marketing of the oil products.

Roles of DPR – Downstream

  • Responsible for the approval of licences for refineries, petrochemicals, fertilizer plants, jetties, depots, lube blending and retail outlet
  • The nomination of vessels for crude, condensate & NGL exportation
  • Ensure the soundness of downstream Oil and Gas facilities and pipeline systems
  • Ensure honest measurements at custody transfer points
  • Issuance of importation permits and clearance for petroleum products
  • Issuance of export permits for crude oil and petroleum products
  • Determine and endorse the quality of imported petroleum products to ensure they meet established standards.
  • Enforcement of government policies on downstream Oil and Gas matters.

3. REVENUE

Functions of DPR in Revenue Generation

Royalty

This has to do with charges made by the department and shares of the profit paid by Royalties on all producing fields

Rent

The department is responsible for collecting rents for the federal government of Nigeria from concessions awarded yearly. The department then pays this into a Federal government account with the Central Bank of Nigeria.

Petroleum Profit Tax (PPT)

The Federal Inland Revenue (FIRS), a part of the department collects the petroleum profit tax for the federal government of Nigeria.

Gas Flare Penalty

This has to do with revenues generated from penalties levied on oil companies for gas flaring. Gas flaring is when natural gas associated with crude oil is burned off in the atmosphere when it is pumped up from the ground. This penalty is meant to deter companies from frequent gas flaring.

Other operations of the Department of Petroleum Resources are Engineering and Standards, Laboratory, Gas, Health, Safety and Environment.

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