A Review of the Nigerian Energy Industry

Nigeria: What investors need to know about NPRC under PIGB

*NNPC Towers, Central Business District, Garki, Abuja.

Michael James

01 June 2017, Sweetcrude, Lagos — The passage of the Petroleum Industry Governance Bill, PIGB by the Senate last week has received commendations and backlash from different quotas in the oil and gas industry.

Some believed that it is a welcome development while others are of the view that the PIGB will have minimal impact in the industry except other bills are passed.

Regardless of the differing opinions about PIBG, here are some few things you need to know about the creation of the Nigeria Petroleum Regulatory Commission, NPRC.

When finally approved by House of Representatives and consented by the Executive arm of government, the PIGB will create NPRC.

Under the Act, the NPRC will serve as a corporate body with perpetual succession and a common seal and which may sue or be sued in its corporate name.

The Act states that the Commission shall have the power to (a) enter into contracts and incur obligations; (b) acquire, hold, mortgage, purchase and deal with property, whether movable or immovable, real or personal; and (c) do all such things as are necessary for or incidental to the carrying out of its functions and duties under this Act.

From the date of the commencement of PIGB Act, without further assurance, the Commission shall be vested with all assets, funds, resources and other movable and immovable properties which immediately before the commencement of this Act were held by the Petroleum Inspectorate, the Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency.

Section 4 of the bill states that as from the date of commencement of the PIGB Act (a) the rights, interests, obligations and liabilities of the Petroleum Inspectorate, Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency existing immediately before the Effective Date under any contract or instrument or law or in equity shall by virtue of this Act be assigned to and vested in the Commission;

Subsection (b) added that any such contract or instrument covered by subsection 4(a) of this section shall be of the same force and effect against or in favour of the Commission and shall be enforceable as fully and effectively as if instead of the Petroleum Inspectorate, Department of Petroleum Resources or the Petroleum Products Pricing Regulatory Agency, the Commission had been named therein or had been a party thereto; and (c) states that the Commission shall be subject to all the obligations and liabilities to which the Petroleum Inspectorate, Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency were subject immediately before the Effective Date and all other persons shall as from the Effective Date have the same rights, powers and remedies against the Commission as they had against the Petroleum Inspectorate, Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency immediately before the Effective Date.

Section (5) of the Act states that the Commission shall be structured into departments as its Board may, from time to time, deem appropriate for the effective discharge of its functions under this Act.

The objectives of the Commission according to the Act includes (a) promote the healthy, safe and efficient conduct of all petroleum operations in an environmentally friendly and sustainable manner; (b) promote the efficient, safe, effective and sustainable infrastructural development of the petroleum industry; (c) ensure compliance with all applicable laws and regulations governing the petroleum industry; (d) determine and ensure the implementation and maintenance of technical standards, codes and specifications applicable to the petroleum industry in line with global best practice;

Others are (e) subject to the provisions of this Act, execute Government policies for the petroleum industry assigned to it by the Minister; (f) promote an enabling environment for investments in the petroleum industry; (g) ensure that regulations are fair and balanced for all classes of lessees, licensees, permit holders, consumers, and other stakeholders; (h) in consultation with the Ministry of Environment, ensure strict implementation of environmental policies, laws and regulations as pertains to oil and gas operations; and (i) implement such other objectives as are consistent with the provisions of this Act.

Functions of the Commission
Without ambiguity, the Act stipulated the functions of the commission which include to (a) administer and enforce policies, laws, and regulations relating to all aspects of petroleum operations which are assigned to it under the provisions of this Act or any regulations made in pursuance of this Act or under any other enactment; (b) monitor and enforce compliance with the terms and conditions of all leases, licences, permits and authorisations issued in respect of any petroleum operations;

(c) define and enforce approved standards for design, construction, fabrication, operation and maintenance for all plants, installations and facilities utilized or to be utilized in petroleum operations; (d) in consultation with the Ministry of Environment, ensure adherence to applicable national and international environmental and other technical standards by all persons involved in petroleum operations; (e) establish, monitor, regulate and enforce health and safety measures relating to all aspects of petroleum operations;

(f) keep public registers of all leases, licences, permits and other authorizations issued by the Commission or the Minister and any renewals, amendments, extensions, suspensions and revocations thereof; (g) monitor the activities of the holders of leases, licences, permits and other authorizations issued by the Commission or the Minister to secure and enforce compliance with the terms and conditions thereof and carry out enquiries, tests, audits, investigations and any other undertakings deemed necessary for performance of this responsibility; (h) publish reports and statistics on the petroleum industry; (i) develop and publish methodologies for tariffs and pricing relating to third party access to petroleum facilities from time to time by regulation;

(j) establish the framework for the validation and certification of national hydrocarbon reserves, and (k) advise the Minister on fiscal and other issues pertaining to the petroleum industry. (l) undertake the evaluation of national reserves, carry out or coordinate long-term forecasting and perform reservoir management studies; (m) conduct regular audits of the activities of operators engaged in petroleum operations and oil service companies in order to ensure compliance with Nigerian laws and requirements for petroleum operations;

(n) maintain a petroleum industry data bank comprising all data acquired by or given to the Commission in the exercise of its statutory functions; (o) supervise and ensure accurate calibration and certification of equipment used for fiscal measures for upstream petroleum operations; (p) issue licences or permits and any other authorisations necessary for all activities connected with, but not limited to the following: (i) Seismic, (ii) Drilling, (iii) Design, fabrication, construction, commissioning and decommissioning of all facilities for upstream petroleum operations, and (iv) Maximum efficiency rate test and other well test/production related activities;

In this article

Join the Conversation