FG, lawyers meet over PIA implementation

The Federal Government, on Wednesday, engaged the General Counsel and Legal Advisers’ Forum of the Mid and Downstream Operators in the oil sector on the seamless implementation of fuel subsidy removal and other aspects of the Petroleum Industry Act 2021.

Officials of the Nigeria Midstream and Downstream Petroleum Regulatory Authority met with the legal counsels of the oil and gas industry in Abuja, where participants discussed measures required for the smooth implementation of the PIA in a deregulated market, among others.

“The essence of this engagement is to deliberate on the current legal framework for the Nigerian oil and gas industry as intended by the PIA 2021, present clarity and insights to the sections of the law with diverse/different interpretations.

“For example, Sections 7ee and 8d, discuss value chain propositions in a deregulated market and propose a way forward for a seamless operationalisation of the objectives of the PIA.

“We are aware that stakeholders and potential investors require regulatory clarity to drive investment decisions and guide operations to ensure compliance with legal provisions and prevent reputational damage,” the Chief Executive, NMDPRA, Farouk Ahmed, stated.

He said regulatory clarity was also beneficial to the regulators as it would allow both entities to focus on their mandates as intended by law for the benefits of the industry and Nigerians.

Ahmed further explained that the PIA was designed to restructure the industry by creating a demarcation between the upstream, midstream and downstream value chains for growth and efficiency.

“To fully achieve this key objective, it also created two regulatory bodies from the erstwhile regulators with clear, distinct functions and mandates. The NUPRC (Nigeria Upstream Petroleum Regulatory Commission) is mandated to fully regulate all upstream operations as defined in Section 318 in the PIA.

“It is to conduct measurement of crude oil and natural gas produced for the purpose of royalty determination and ensure an arm’s length transfer to midstream operations at measurement points, while the NMDPRA on the other hand is saddled with regulating the

midstream and downstream operations whether or not related to a lease,” Ahmed, who was represented by the Executive Director, NMDPRA, Ogbogu Ukoha, stated.

He, however, noted that he was not oblivious of the major policy shift that the implementation of the PIA had necessitated, which might have significantly impacted on business models.

“I dare say it might take a while to fully adjust and change our modus operandi, but you will agree with me that to meet the objectives of the PIA we require complete commitment from all stakeholders.

“To fast track the implementation of the PIA, all stakeholders must adhere to the provisions of the law and in situation where ambiguities or lacunas exists, engagements such as this forum must be encouraged to seek clarity and deepen collaboration, the NMDPRA boss stated.

Earlier, the agency’s Secretary and Legal Adviser, Joseph Tolurunse, announced that the NMDPRA would gazette four more regulations for the midstream and downstream sector and same would be published on its website.

“Currently 12 regulations has been gazetted, eight are about to be gazetted, so we finalise about 20 regulations, but four are about to be gazetted now,” he stated.

Providing additional reasons for the organising the forum, Tolorunse said it was “to discuss issues pertaining to deepening industry legal practitioners’ understanding of the authority’s powers, functions, and regulations.

“Provide clarity on perceived regulatory overlaps between the authority and commission; promote the business enabling and investment opportunities derivable from the licences, permits and authorisations issued by the authority.

“And addresse legal concerns arising from the implementation of the PIA and the authority’s regulations.”

He said the authority’s objectives in creating the forum were to enhance compliance, enable more intimate conversations with legal practitioners in the oil industry on their areas of concern, and provide proper guidance to their respective managements on the dichotomy between upstream, midstream and downstream petroleum operators.