NMDPRA Meets Oil Firms, Provides Clarity on Upstream, Downstream Regulators’ Roles

Emmanuel Addeh in Abuja

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has provided clarity on its roles and those of the Nigerian Upstream Petroleum Regulatory Commission (NURPC), insisting that the Petroleum Industry Act (PIA) was clear on the regulators’ activities.

The meeting with general counsel and legal advisers forum of the oil and gas industry which held in Abuja, came on the back of what appeared to be recent clashes between the NMDPRA and the NUPRC relating to the extent of their powers.

Speaking during the programme, the Chief Executive of the NMDPRA, Mr Farouk Ahmed, explained that there was the need to enlighten stakeholders to enable the smooth implementation of the (PIA).

Ahmed, who was represented by the Executive Director, Distribution Systems, Storage & Retailing Infrastructure, Ogbugo Ukoha, explained that the PIA was intentionally designed, amongst other key objectives to create two distinct but complimentary regulatory entities.

Ahmed added that the reasons were to promote gas utilisation through deepening of midstream operations, unbundle the composite licensing regimes to encourage more participation across the upstream, midstream and downstream value chain, attract local and foreign investment and sustainably grow the industry for host communities and Nigerians.

The essence of the engagement, he said, was to deliberate on the current legal framework for the Nigerian oil and gas industry as intended by the PIA 2021, present clarity and insights to the sections of the law with diverse/different interpretations.

Noting that stakeholders and potential investors require regulatory clarity to drive investment decisions and guide operations to ensure compliance with legal provisions and prevent reputational damage, Ahmed said that regulatory clarity was also beneficial to the regulators.

 According to him, the PIA was designed to restructure the industry by creating a demarcation between the upstream, midstream and downstream value chain for growth and efficiency.

To fully achieve this key objective, Ahmed pointed out that it also created two regulatory bodies from the erstwhile regulators with clear, distinct functions and mandates.

“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.