NMDPRA Moves to Streamline Management of Confiscated Illegal Crude Oil Assets

*Rolls out seven new regulations for operators

Emmanuel Addeh in Abuja

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has moved to streamline the management of illegal oil assets seized from operators, with the rollout of the Disposal of Confiscated Materials and Equipment Regulation, 2023.

In addition to the confiscation of materials regulation, the industry regulator also commenced a three-day consultation on anti-competition and customer protection regulation as well as the code of conduct and petroleum data depository regulation.

Others include the registration and publication of licences, permits and authorisations regulation; separation of licensed activities and surrender of licence or permit regulation as well as third-party access and open access regulation.
Speaking at an event, the Chief Executive Officer of the NMDPRA, Mr. Farouk Ahmed, noted that the consultation was necessary because the operators needed to be engaged to lessen friction during implementation.

Represented by the Executive Director, Distribution Storage Systems and Retailing Infrastructure (DSSRI), Mr. Ogbugo Ukoha, Ahmed stressed that 16 regulations had already been gazetted, while four were yet to be processed.
“Let me make a point about regulations. Statutes such as the Petroleum Industry Act (PIA) are meant to provide a framework or the legal skeleton for the work that we do.

“They provide the necessary details and flesh as well as breath life into it. Therefore, it is the authority’s responsibility to provide that kind platform for the industry.
“But more importantly, regulations are only an aspect of it. Compliance is also really critical to regulations. And it’s because of this that the PIA compels us that when we want to draft any regulation, we invite operators to discuss it, consult with them and then get feedbacks from them,” he stated.

Giving an overview of the new regulations, the Secretary and Legal Adviser, NMDPRA, Dr. Joseph Tolorunse, said the code of conduct regulation outlines industry-specific conduct and corporate governance standards for companies operating in the sector and provide sanctions and penalties for non-compliance.
For the data depository regulation, he explained that it provides the procedure for the submission, collection, and management of technical data in a repository to help in data analytics.

“The Disposal of Confiscated Materials and Equipment regulation provides common, simplified, and documented processes and procedures for the disposal of confiscated materials and equipment in the Nigerian midstream and downstream petroleum industry.

“It encourages transparency and accountability in the use of financial resources generated from the disposal of the properties.
“It applies to all activities relating to or connected with the disposal of confiscated materials and equipment in the Nigerian midstream and downstream industry.
“More often than not, we receive these things, especially in the downstream space where illegal operators are very prevalent, sometimes when security officers arrest them and hand them over to us, we do not know what to with them. So, we need these procedures for the these products or equipment,” Tolorunse added.

According to him, the registration and publication of licences, permits and authorisation regulations would establish publicly accessible registers of licences, permits, authorisations as well as exemptions issued, revoked, suspended, surrendered or withdrawn.
It would also include any modifications, renewals, assignments, amendments or exemptions, or any other matter affecting the status of or any interest in a licence, permit or authorisation, he noted.

Also, the NMDPRA secretary said the third party access rule would foster a competitive environment in the midstream and downstream petroleum sector by ensuring equitable and non-discriminatory access to facilities, infrastructure, and services for third parties.

Besides, he noted that it would help optimise the utilisation of existing petroleum infrastructure, minimise duplication of investments, and facilitate the efficient movement of petroleum products within the supply chain.
Furthermore, Tolorunse stressed that it would facilitate the availability of affordable and diverse petroleum products to consumers by reducing transportation costs and promoting market-driven pricing.