Unlicensed petroleum operations declared illegal as regulator enforces strict permit rules

The Nigeria Midstream, Downstream Petroleum Regulatory Authority (NMDPRA) has declared all unlicensed midstream and downstream petroleum activities illegal, signalling a sweeping regulatory crackdown on non-compliant operators across the value chain.

The industry regulator, in a circular signed by Abiodun Adeniji, Authority Chief Executive, NMDPRA, stated that no person shall establish, construct, operate or undertake any midstream or downstream petroleum activity except with an appropriate licence, permit or authorisation granted by the Authority in accordance with the Petroleum Industry Act.

The circular, which was sighted by BusinessDay, was addressed to managing directors/ CEOs of oil and gas midstream companies, downstream companies, petrochemical and fertiliser companies, and oil and gas import and export terminals.

It maintained that all midstream and downstream petroleum operations, including refining, processing, storage, bulk transportation, pipelines, gas transportation networks, terminals, jetties, wholesale supply, importation, exportation, distribution and sale of natural gas and petroleum liquids, are subject to the regulatory oversight of the Authority.

“The Petroleum Industry Act 2021 (PIA) was enacted to establish clear, distinct and comprehensive regulatory institutions for the Nigerian petroleum industry. Pursuant to sections 29, 31, 32 and 33 of the PIA, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (Authority) is the statutory regulator responsible for the technical, commercial, operational and licensing regulation of all midstream and downstream petroleum operations in Nigeria.

“The operation of any midstream or downstream petroleum facility within a free zone, export processing zone or similar area does not exempt such facility and its operations from compliance with the provisions of the PIA and regulations made thereunder.

“No person shall establish, construct, operate or undertake any midstream or downstream petroleum activity except with an appropriate licence, permit or authorisation granted by the Authority in accordance with the PIA,” the Authority stated.

Calling on all industry participants to ensure compliance with the provisions of the PIA and all regulations made thereunder, the Authority said that any person engaging in midstream and downstream petroleum operations without an appropriate licence, permit or authorisation from the Authority shall be subject to sanctions.

It also stressed that in pursuance of section 48(1) of the PIA, any government ministry, department or agency exercising any power or function or taking any action, which may have direct impact on midstream or downstream petroleum operations, shall consult with the Authority prior to issuing any regulation, guideline, enforcement order or directive, exercising any such power or function or taking any such action.

“The Authority shall review the recommendations of the Government ministry, department or agency and communicate the decision accordingly, and the decision shall be complied with by the relevant Government ministry, department or agency; and by virtue of Section 309 of the PIA, where the provisions of any other enactment are inconsistent with the PIA, the provisions of the PIA shall prevail.

“In view of the foregoing, any person engaging in midstream and downstream petroleum operations without an appropriate licence, permit or authorisation from the Authority shall be subject to sanctions in accordance with the relevant provisions of the PIA,” the circular read.