The PETROLEUM INDUSTRY ACT:
AN OVERVIEW
About the BOOK
The law that regulates the Nigeria Petroleum Industry is the Petroleum Industry Act[ Act No. 6. 2021.] (PIA or Act) and regulations made pursuant to the Act. The Act was signed into law by the President of the Federal Republic of Nigeria on 16 August 2021.
Prior to 2021, there were a plethora of laws that were directly and indirectly applicable to the entire value chain of petroleum business (upstream, midstream and downstream sectors) in Nigeria.
The main subjects or issues addressed in the laws are operational, environmental, taxation, fiscal, administrative, health and safety or a combination of these. However, these laws have been consolidated into one law, that is, the Act.
It is important to note that the Act provides for two regulatory agencies: the Nigerian Upstream Petroleum Regulatory Commission (the Commission) and Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority) that would be responsible for the technical and commercial regulation of the upstream, and midstream and downstream petroleum sectors, respectively.[ Sections 4 to 51 of the Act. See Kasirim Nwuke, ‘Article on Nigeria’s Petroleum Industry Act: Addressing old problems, and creating new ones’ (2021), www.brookings.edu accessed on December 29, 2024. ]
The passage of the Act repealed several existing laws such as the Gas Reinjection Act (GRA) , Hydrocarbon Oil Refineries Act (HORA), Motor Spirits (Returns) Act (MSRA), Nigerian National Petroleum Corporation (Projects) Act (NNPCPA), Nigerian National Petroleum Corporation Act (NNPC Act), Petroleum Products Pricing Regulatory (Establishment) Act (PPPRA), Petroleum Equalisation Fund Act (PEFA), the Petroleum Profit Tax Act (PPTA), and the Deep Offshore and Inland Basin Production Sharing Contract Act (DOIBPSCA).[ Section 310 of the Act.]
It is important to note that while some of the repeals such as GRA, MSRA, NNPCPA, PPPRA and PEF are immediate, others such as NNPC Act, PPTA and DOIBPSCA will only become effective in the future when certain conditions have been met. For instance, the NNPC Act remains in effect until NNPC ceases to exist after all its assets and liabilities have been either transferred or extinguished, while PPTA and DOIBPSCA will govern oil mining leases and oil prospecting licenses until their expiration where they did not convert to the terms of the Petroleum Industry Act.