The Nigerian Senate today, 7th of October 2021 confirmed the appointment of Idaere Gogo Ogan (Chairman); Farouk A. Ahmed (Chief Executive Officer); Abiodun Adeniji (Executive Director, Finance and Accounts); and Ogbugo Ukoha ( Executive Director, Distributions System, Storage and Retail Infrastructure) as members of the board of the Midstream and Downstream Regulatory Authority.
Senate Confirms the Board of the Upstream Petroleum Regulatory Commission
The Senate on Wednesday 6th October 2021, confirmed the appointment of Isa Ibrahim Modibbo – Chairman; Engr. Gbenga Komolafe – Chief Executive; Hassan Gambo – Executive Commissioner, Finance and Accounts; and Ms Rose Ndong – Executive Commissioner, Exploration and Acreage Management. The President is expected to appoint other non-executive members to the Board of the Commission, once the proposed amendment to the PIA is passed.
There are a number of tasks immediately before the Commission including – staffing the Commission appropriately; instituting change management; publishing draft regulations and guidelines; publishing the domestic base price for natural gas.
Nigeria begins implementation of the Petroleum Industry Act 2021
Since the passage of the Petroleum Industry Act (“PIA”) on August 16, 2021, several noteworthy developments have taken place, which we highlight below.
- The Federal Government sets up PIA Implementation Committee
- NNPC becomes a limited liability company
- The President and Minister of Petroleum Resources constitutes board of the Regulatory Institutions
- The President seeks to amend the PIA
The Federal Government sets up PIA Implementation Committee
On Thursday, 19th of August 2021, the Federal Government inaugurated the steering committee for the implementation of the PIA, headed by the Minister of State for Petroleum Resources, Chief Timipre Sylva. The implementation structure is made up of the Steering Committee to be supported by an Implementation Working Group/Coordinating Secretariat (“IWGCS”) for effective and timely implementation of the PIA during the transition to the new petroleum industry regime.
The Official Gazette of the Petroleum Industry Act 2021
Petroleum Industry Act 2021
The copy of the Petroleum Industry Bill (now the Petroleum Industry Act 2021) signed into Law by President Muhammadu Buhari yesterday, 16th August 2021.
Petroleum Industry Act 2021
The copy of the Petroleum Industry Bill (now the Petroleum Industry Act 2021) signed into Law by President Muhammadu Buhari yesterday, 16th August 2021.
President Buhari Signs The Petroleum Industry Bill Into Law
Senate Report on the PIB
The Senate Report on the PIB may be found here. A notable difference from the report of the House of Representatives is the insertion of a new section 317(8), which seeks to implement the backward integration policy, previously utilised in the sugar and cement industries, in the petroleum industry. Section 317(8) provides as follows:
(1) The Authority shall apply the Backward
Integration Policy in the downstream
petroleum sector to encourage investment in
local refining.
(2) Pursuant to subsection (1) of this section,
licence to import any product shortfalls may be
assigned only to companies with active local
refining licences and proven track records of
international crude oil and petroleum products
trading.
(3) Import volume to be allocated between
participants shall be based on criteria to be set
by the Authority taking into account the
respective refining output in the preceding
quarter, share of active wholesale customers
competitive pricing and prudent supply and
distribution track records.
(4) To safeguard the health of Nigerians,
imported petroleum products shall conform to
the Afri-5 specification (50 ppm sulphur) as per
the ECOWAS declaration of February, 2020 on
adoption of the Afri-Fuels Roadmap.
The effect of the provisions of section 317(8)(1-3) will be to stifle competition in the supply of petroleum products and will ultimately have an impact on the price of all petroleum products.
Senate passes the Petroleum Industry Bill
The Nigerian Senate passed the Petroleum Industry Bill earlier today. The Bill has now been passed by both houses of the National Assembly. Both versions of the Bill, which are similar, will go through the reconciliation process before going for the President’s assent.