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Petroleum Industry Act
Nigeria’s New Oil and Gas Regulatory Framework
Our Petroleum Industry Act (PIA) newsletter is a series of four issues, this document being Part 1, and it is focused on chapter 1 of the PIA. In it, we analyse the key aspects of the governance of the Nigerian petroleum industry and its institutions.
In the subsequent issues, we will dissect the other aspects of the PIA, as summarised below:
- Part 2: Administration
- Part 3: Host communities
- Part 4: Fiscals and closure
The overall governance and institutional structure of Nigeria’s petroleum industry are fundamentally different from the preexisting structure.
We have presented key highlights in the following bullet points:
- Under the PA, the governance and administration of the petroleum industry rest with the MoP. However, over the years, the Minister had traditionally delegated certain functions to the Department of Petroleum Resources (DPR) or its predecessor agencies. The DPR is a government agency within the Ministry of Petroleum which makes it fully dependent and subject to the full control of the MoP.
- The PIA created two regulatory authorities, one for the upstream sector (i.e. Nigerian Upstream Petroleum Regulatory Commission or ‘the Commission’) and another one for the midstream and downstream sectors (i.e. ‘Nigerian Midstream and Downstream Petroleum Regulatory Authority or ‘the Authority’).
- DPR, which is currently the principal regulatory agency for the Nigerian petroleum industry, will cease to perform the functions that will be performed by the Commission and the Authority. The MoP may wish to retain the DPR to perform certain ministerial functions, as may be delegated.
- Petroleum Products Pricing Regulatory Authority (PPRA), which is responsible for regulating the prices of regulated petroleum products, will cease to exist, and its functions will be performed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.