Insights, Oil and Gas

Review of the Petroleum Industry Bill 2021- Part Two

In the first instalment of our series on the review of the Petroleum Industry Bill 2021 (“PIB”, “Bill”), we focused briefly on ownership of petroleum, objectives and the extent of the powers of the Minister under the PIB as opposed to the subsisting provisions under the Petroleum Act (“PA”) under Chapter One, Parts I and II of the Bill which is focused on Governance and Institutions. In this edition, we will be taking a look at Part III of Chapter One which establishes one of the major institutions under the Bill namely, the Nigerian Upstream Regulatory Commission (the “Commission”).

Establishment and Objectives
The Commission was established under Section 4 of the PIB with the objectives amongst others, to regulate upstream petroleum operations including technical, operational and commercial activities, to implement ministerial industry policy, to ensure compliance with all applicable laws and regulations governing the sector, to determine and implement technical standards, codes, practices, and specifications in line with good international petroleum industry practices and ensure healthy environmental operations.

The primary responsibility of the Commission is the technical, operational and commercial regulation of upstream petroleum operations. If you are conversant with the operations of the Department of Petroleum Resources (“DPR”), which is a division under the Ministry of Petroleum Resources, then note that the Commission was created to more or less take over the role of the DPR but only as far as it relates to upstream operations in the Nigerian oil and gas industry as opposed to the current position where DPR is a single regulator handling regulation of both the technical and commercial aspects of the entire industry value chain, i.e., upstream, midstream, and downstream with strong influence from the Nigerian National Petroleum Corporation (“NNPC”).

Going forward, the technical, operational and commercial aspects of the midstream and downstream value chain of the industry will now be regulated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the “Authority”). An exception to the separation of upstream from midstream and downstream regulatory oversight is where in situ facilities or fixed or floating platforms or vessels provide for fully integrated upstream and midstream petroleum operations. In such cases, the Commission is empowered to consider such integrated operations as upstream petroleum operations for the purpose of regulatory oversight…

 

 

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