For oil sector operators who complain of too many regulatory agencies with often conflicting rules, the revised Petroleum Industry Bill (PIB) under consideration by lawmakers does not provide a reprieve, with the creation of another regulator.
Under the new PIB, there would be two regulatory agencies, the Nigerian Upstream Regulatory Commission which subsumes the role of the Department of Petroleum Resources (DPR) and the authority to regulate the downstream sector.
“What is the philosophy driving the structure and what efficiency is hoped for?,” asked analysts at the Centre for Petroleum Information, an energy sector think tank, in a newly published book on ‘Energy Insight Nigeria’ edited by Victor Eromosele, raising fears that conflicting rules in the oil sector will continue.
Nigerian Upstream Regulatory Commission
The revised PIB provides for the Nigerian Upstream Regulatory Commission to regulate upstream petroleum operations including technical, operational, and commercial activities, and also to ensure compliance with all applicable laws and regulations governing upstream petroleum operations.
It shall be a body corporate with perpetual succession and a common seal.
The powers and functions allocated to this regulator are so broad and that it cancels out the functions of many agencies already in existence. It has both technical and commercial functions and would oversee frontier basin exploration activities.
The technical regulatory functions of the Commission include enforce, administer and implement laws, regulations, and policies relating to upstream petroleum operations; ensure compliance with applicable national and international petroleum industry policies, standards and practices for upstream petroleum operations; and establish, monitor, regulate and enforce health, safety and environmental measures and standards relating to upstream petroleum operations.
For industry operators, this raises the concern for potential conflicting regulations. For example, the Ministry of Environment and the Commission could insist on separate Environmental Impact Assessments for the same project as currently obtains.
Section 10 of the Bill empowers the Commission to enforce regulations, policies, or guidelines formerly administered by the Department of Petroleum Resources and it would issue guidelines on the generation, use, storage, and transportation of radioactive sources and materials in consultation with the Nigerian Nuclear Regulatory Authority. This creates the potential for conflict among the agencies.
Some of its commercial regulatory functions include to review and approve the commercial aspects of field development plans and other related upstream petroleum operations; supervise costs and cost control in upstream petroleum operations; and review and approve commercial aspects of work programmes and field development plans for all licensees, lessees or permit holders in upstream petroleum operations, including the NNPC and NNPC Limited.
Governance
It would have a Governing Board which shall be responsible for the policy and general administration of the Commission, led by a chief executive and members all appointed by the President and confirmed by the senate.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority
The objectives of the Authority is to regulate midstream and downstream petroleum operations, including technical, operational, and commercial activities, and also ensure efficient, safe, effective, and sustainable infrastructural development of midstream and downstream petroleum operations.
