Oil Regulator Set to Release More Rules to Guide Operations

The Nigeria Midstream Downstream Petroleum Regulatory Authority (NMDPRA) is set to release four new regulations to guide the activities of the midstream and downstream sector of the oil and gas industry.

This was disclosed by Joseph Tolorunshe, Secretary and Legal Adviser, NMDPRA during the General Counsel and Legal Advisers’ Forum held on Wednesday in Abuja.

He noted that following the passage of the Petroleum Industry Act 2021, 12 Regulations have been gazetted and eight more will follow, which will give a total of 20 gazetted regulations.

Farouk Ahmed, Chief Executive, NMDPRA in his remarks also spoke on the perceived regulatory overlaps between the NMDPRA and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

Ahmed who was represented by Ogbugo Ukoha, Executive Director, Distribution Systems, Storage & Retailing Infrastructure said stakeholders and potential investors require regulatory clarity to drive investment decisions and guide operations to ensure compliance with legal provisions and prevent reputational damage.

He added that the PIA was designed to restructure the industry by creating a boundary between the upstream, midstream and downstream value chain for growth and efficiency.

“The NUPRC is mandated to fully regulate all Upstream operations as defined in Section 318 in the PIA, conduct measurement of crude oil and natural gas produced for the purpose of royalty determination and ensure an arm’s length transfer to midstream operations at measurement points while the NMDPRA on the other hand is saddled with regulating the Midstream and downstream operations whether or not related to a lease,” he said.

Making reference to section 25 and 48 of the PIA, he said it is necessary to understand the two agencies are different from each other as they have diverse functions and roles to play in the industry.

“I am not oblivious of the major policy shift that the implementation of the PIA has necessitated which may have significantly impacted our business models, to fast track the implementation of the PIA, all stakeholders must adhere to the provisions of the law,” he said.