HOW MARGINAL ARE THE MARGINAL FIELDS’ PROVISIONS UNDER THE PETROLEUM INDUCTRY ACT 2021?

by Adeoye Adefulu & Lateef Bamidele

The Petroleum Industry Act 2021 (“PIA” or “Act”) introduced changes across the Nigerian petroleum industry, and one of such changes is the overhaul of the administration of marginal field assets. The Act set a deadline of 18 months (February 15, 2023) for the transition of the existing marginal field assets into the PIA terms[1] and put an end to the regime[2] which has hitherto enabled small and indigenous players to participate in the industry for about two decades. This article examines the transition mechanisms for this category of assets and what it portends for the industry operators.

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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.