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New petroleum regulations by NMDPRA

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By Mercy Kelani

There are 10 regulations to be newly implemented to enhance investment.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in a bid to bequeath the Petroleum Industry with laws and policies that will enhance investment, has started the review of the midstream and downstream petroleum regulations. The revelation was made by the Minister of State for Petroleum Resources, Chief Timipre Sylva, on August 1st, 2022, at the NMDPRA stakeholders’ consultation forum on regulations where he also stated that the regulations had been discussed with stakeholders for review and input.

The regulations are; the Petroleum (Transportation and Shipment) Regulations, Assignment and Transfer of License and Permit Regulations. All together, there are 10 regulations to be considered, and they are; Midstream and Downstream Petroleum ( Operations) Regulations, Gas Pricing Domestic Demand and Delivery Regulations, Petroleum Pipeline Regulations, and Natural Gas Pipeline Tariff Regulations, while others are Environment Regulations for Midstream and Downstream Operations, Midstream and Downstream Decommissioning and Abandonment Regulations, Environmental Remediation Funds Regulation, and Gas Infrastructure Funds Regulation.

The regulations will help FG achieve present and future goals.

Chief Timipre revealed that as a result of the enactment of the Petroleum Industry Act (PIA) of 2021, the sector became saddled with the responsibility of regulating the mid-and-downstream operations, both technically and commercially. The review, also, was said to be a fulfillment of the provisions of Section 33 and 21 of the PIA 2021. For this reason, NMDPRA is to make consultations with significant stakeholders before the final approval of the regulations, in regards to the processing, transmission, refining, sale, and storage of petroleum products.

Also, with the regulations in place, the government would easily and accurately develop plans that would help to achieve present and future goals. Likewise, it will bring about more investments and create more job opportunities. However, in order to achieve this goal easily, the total participation and engagement of stakeholders in the development of the regulations, processes and procedures are essential, having initiated and issued a proposal of 10 regulations which cover pricing, environmental management, and operations, in accordance with its statutory mandate.

The authority must consult with stakeholders before amendments.

Although the present situation of the country’s local energy landscape is critical, with a pressing need for innovative solutions, the newly proposed regulatory instruments might be an opportunity to amend the situation. The regulations would also give room for clarity and ensure certainty for investors, promoting and building investor’s confidence, likewise increasing and enabling an improvement in foreign and indigenous participation in these sectors. All these in return, will optimize and increase value for all stakeholders.

The Authority Chief Executive, NMDPRA, Mr. Farouk Ahmed, mentioned that the proposed regulations are in alignment with the vision and commitment of the President of Nigeria, Muhammadu Buhari, and the Minister of State for Petroleum Resources. In addition, amidst appreciation for the passage of the PIA, he expressed that Section 216 of the PIA made it compulsory for the authority to have a consultation with stakeholders before proceeding with the amendments and implementation of the regulations.

The regulations will enhance domestic gas value.

A major goal of the regulations is to ensure that they efficiently enable the Federal Government’s Decade of Gas initiative, improving investment, thereby enhancing the domestic gas value. The Chairman Senate Committee on Petroleum (Downstream), Sen. Sabo Mohammed, also stated that the passage of the PIA into law happens to be a milestone in the legislative history of Nigeria. To complement the need for the regulatory instruments, Sen. Philip Aduda, Vice Chairman, said that with the regulations in place, it will be easy for the PIA to unlock the huge potential of the midstream and downstream sector.


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