Regulation: NMDPRA, NUPRC fight for control of oil industry

By Ibiyemi Mathew

Following the ambiguity in the Petroleum Industry Act (PIA) to clearly spell out the roles of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) without conflicting, both agencies have been in a thug of war over who gets control over the industry.

The rivalry over regulatory control between the two agencies took another turn of events with the NMDPRA directing oil and gas companies to register for midstream and downstream operations separately.

The Authority Chief Executive, Farouk Ahmed, who disclosed this via a letter to oil and gas chief executives which had ‘NMDPRA/OACE/EXC.14/2023/05’ as the reference number, explained that the directive is aimed at strengthening the implementation of the Petroleum Industry Act (PIA).

According to him, “to ensure effective implementation of the overall objectives of the PIA, enable arm’s length transfer dealing, and to deepen the midstream and downstream sectors of the industry for the benefit of the Nigerian people, all holders of subsisting leases, licenses and permits that are engaged in midstream and downstream petroleum operations are hereby directed to register and use separate companies for each stream operation under the Act in line with Sections 212 and 302(3) of the PIA on or before 31 August 2023.”

Engr. Ahmed, who warned companies against non-compliance, said the Authority is aware that the NUPRC has issued directives “which have a direct impact on midstream and downstream petroleum operations without consulting with the Authority as required by the provisions of Section 48 (l) of the PIA.

“You are by this letter directed to disregard any such directives as it conflicts with the PIA. Specifically, Sections 125, 132, 135, and 174 of the PIA state activities require licenses from the NMDPRA while Section 70 of the PIA states the licenses that may be issued by the NUPRC under the Act.”

Earlier, President Bola Tinubu had intervened in the regulatory overlap between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

In a letter dated June 26, 2023, and sent to the Permanent Secretary, Ministry of Justice, the president clarified the operator responsibilities of the two oil and gas agencies.

Tinubu said in delineating the responsibilities of the NUPRC and NMDPRA, certain provisions of the Petroleum Industry Act (PIA) have inadvertently created ambiguity and overlap in regulatory scope.

“The recent issuance of conflicting directives to lease/license holders has created uncertainty in the regulatory and operating environment in this critical sector to the Nigerian economy,” he said.