NMDPRA threatens to sanction firms operating without licence
By Damilare Adeleye
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has threatened to impose sanctions on operators in the oil and gas sector who engage in midstream and downstream petroleum activities without appropriate licences under the Petroleum Industry Act (PIA) 2021.
This warning was contained in a circular dated May 12, 2026, and signed by the agency’s Acting Chief Executive, Abiodun Adeniji.
The circular, addressed to chief executives of oil and gas midstream and downstream companies, petrochemical and fertilizer firms, as well as import and export terminal operators, reaffirmed the NMDPRA’s statutory powers as the sole regulator of midstream and downstream petroleum operations in Nigeria.
According to the Authority, the Petroleum Industry Act established distinct regulatory institutions for the petroleum sector and vested the NMDPRA with the responsibility for the technical, commercial, operational, and licensing regulation of all midstream and downstream petroleum activities.
The Authority stated that its regulatory jurisdiction covers the entire federation, including the continental shelf, territorial waters, exclusive economic zone, free zones, export processing zones, and industrial zones.
It stressed that all operations involving the refining, processing, storage, transportation, pipelines, terminals, jetties, wholesale supply, importation, exportation, distribution, and sale of petroleum products and natural gas fall under its oversight.
The regulator further asserted that operators within free zones and export processing zones are not exempt from compliance with the provisions of the PIA and regulations issued under the law.
The circular stated that no individual or organization is permitted to establish, construct, or operate any midstream or downstream petroleum facility without obtaining the appropriate licence, permit, or authorization from the Authority.
The NMDPRA also cited Section 48(1) of the PIA, noting that any government ministry, department, or agency whose actions may directly affect midstream or downstream petroleum operations must first consult the Authority before issuing directives, regulations, or enforcement orders.
It added that under Section 309 of the PIA, the provisions of the Act supersede any conflicting enactment.
“In view of the foregoing, any person engaging in midstream and downstream petroleum operations without an appropriate licence, permit, or authorisation from the Authority shall be subject to sanctions in accordance with the relevant provisions of the PIA,” the circular stated.
The Authority directed all industry players to ensure immediate compliance with the Petroleum Industry Act and all regulations made pursuant to it.
The latest directive comes amid increasing regulatory tensions within Nigeria’s oil and gas industry following the implementation of the Petroleum Industry Act (PIA) 2021.
The PIA, signed into law in August 2021 by former President Muhammadu Buhari, restructured the petroleum sector and created two major regulators, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for upstream operations and the NMDPRA for midstream and downstream activities.
Since its implementation, there have been recurring disputes over regulatory jurisdiction, licensing powers, and oversight responsibilities, particularly in free zones and export processing areas where some operators previously relied on permits issued by other government agencies.