PIA: Tinubu tackles regulatory overlap, directs NUPRC to control integrated upstream, midstream operations

President Bola Tinubu has 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.

Hence, to facilitate a conducive operating and investment climate pending clarifying amendments to the PIA, the president directed that NUPRC will be the exclusive technical and commercial regulator in respect of upstream petroleum operations and facilities.

This responsibility, Tinubu said, encompasses the licensing, administration, and “monitoring of petroleum facilities that are operationally linked from extraction to and including crude export terminals and the gate of the natural gas processing plant”. 

“NMDPRA shall be the exclusive technical and commercial regulator in respect of petroleum operations and facilities from the exit of the crude export terminals and the entry gate of the natural gas processing plant.”

Tinubu said the integrated upstream and midstream petroleum operations will be considered as the upstream petroleum operations, in accordance with section 318 of the PIA.

“Consequently, pursuant to section 8(d) of the PIA, NUPRC shall have sole jurisdiction over the technical and commercial regulation of integrated petroleum facilities for upstream petroleum operations,” he said.

The president added that the determination of whether petroleum facilities qualify as integrated facilities will rest solely with NUPRC.

“Clear guidelines and criteria shall be established by NUPRC to ascertain the integration status of facilities and ensure consistent application of these criteria,” Tinubu said. 

“NUPRC & NMDPRA shall immediately comply with the directives above and must ensure that no duplication of regulatory responsibilities occurs across any activity.

“This includes refraining from overlapping regulatory functions in relation to activities leading up to and including expórt terminal operations.

“The directives above have implications for staff deployment and financial sustainability of NMDPRA. The ACE NMDPRA, CCE NUPRC, and the special adviser to the president on energy, under the auspices of the chief of staff to the president, shall resolve to work out the modalities and proffer solutions, including potential amendments to the PIA.

“I, hereby, request that this is published in the federal government gazette.”

In May 2023, former President Muhammadu Buhari directed the NUPRC to take over the supervision of all crude oil export terminals in the country, resolving the regulatory overlap between the bodies.

(Cable)