Key highlights
- Nigeria needs to align its regulations for the oil and gas sector to aid more investments.
- Regulatory misalignments create gaps and risks for oil and gas operators in the country.
- NUPRC is in the process of releasing more industry regulations in a few weeks.
The Executive Director, of Development at ExxonMobil Nigeria, Mr. Oladotun Isiaka has said that regulatory misalignment in Nigeria’s oil and gas sector could worsen the ease of doing business if action is not taken to align regulations. He said this during a panel session at the ongoing Nigeria International Energy Summit (NIES) in Abuja.
According to him, stakeholders need to ensure that over the next few years, they do not worsen the ease of doing business and the country does not have additional risk, which then results in exposures, making projects become less competitive within the global atmosphere.
Mr. Isiaka was referencing regulations drafted by both the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). He said:
- “I will use two examples to further buttress what I’m talking about here. It will be contentious but as of today, there exists significant misalignment between the two regulatory agents; misalignment that has created overlaps, overlaps that create gaps, gaps that create risks for us as operators, in certain instances, legal exposure.
- “This example has the capability of making otherwise profitable opportunities less attractive. Another example is the regulations that are being put in place, some of those that are being gazetted so far, are adding risk to the portfolio risk that could make opportunities that are otherwise profitable, become less competitive.
- “We have a lot of opportunities and for us to plan to move them forward is to continue to ensure that we continue to make sure the environment is easy for doing business.”.
NUPRC reaction
While responding to the issues raised by the panelists on regulatory misalignment, the Chief Executive Officer of NUPRC, Mr. Gbenga Komolafe said the commission’s regulations have carried everyone along to ensure that the sector is not strangulated. He also said the regulations are in conformity with the government’s energy transition plan. According to him, the commission plans to release 13 new regulations in the coming weeks.
What you should know
During an Arise TV interview that took place earlier in the month, Audrey Joe Ezigbo, the co-founder of Falcon Corporation and former President of the Nigeria Gas Association (NGA) also spoke about the multiplicity of agencies within the gas sector which creates bureaucratic bottlenecks that have resulted in lost time for many operators. At the time, she had said:
“If I want to build a tank farm to de-bottleneck liquefied petroleum gas (LPG) storage within Port Harcourt, I should not have to deal with 30 different agencies putting chicken and egg-type situations before me, creating bureaucracies leading to lost time.”
