After Buhari, Tinubu wades into NUPRC, NMDPRA altercation over overlapping functions
Barely two months after Nigeria’s erstwhile President, Muhammadu Buhari intervened in the incessant clashes between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), President Bola Tinubu has again moved to halt the continuing trend.
In a memo sighted by THISDAY in Abuja yesterday, Tinubu sought to establish clear lines of demarcations between the responsibilities of both industry regulators, pending the amendment to the contentious portions of the Petroleum Industry Act (PIA) by the National Assembly.
The official communication by the president to the Ministry of Justice was titled: “Delineation of Regulatory Oversight Between Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Pending Clarifications by Way of Amendment to the Petroleum Industry Act 2021.”
In May, just before his exit, Buhari had directed the NUPRC to take over the supervision of all crude oil export terminals in the country in a bid to end the frequent altercations.
At the time, Buhari who also doubled as the Minister of Petroleum Resources, in a letter written to the agencies and copied International Oil Companies (IOCs) specifically directed the NMDPRA to hands off any activities that had to do with regulatory work at crude oil export terminals in Nigeria.
The then president further instructed the NMDPRA to immediately comply with an earlier Senate Resolution on the matter to exit the terminals.
The federal government also urged the minister of state at the time to ensure immediate compliance and report back within 14 days that the resolution was being adhered to by all stakeholders.
But hardly had the content of the memo been fully assimilated when a few weeks later, another public clash occurred after the NMDPRA accused ExxonMobil of being involved in the ‘illegal lifting’ of petroleum products from an offshore terminal without its authorisation.
As THISDAY later found out, the accusation by the NMDPRA was just a continuation of the power tussle between both oil and gas industry regulators.
However, ExxonMobil debunked the allegation, saying its operations were carried out in full compliance with the law, with sources within the company confirming that it was “the fight between NUPRC and NMDPRA over who controls export…messing up the image of the country.”
But to fully ensure that the new directive sank, Tinubu in the letter he personally signed, deployed the use of a diagrammatic illustration to push home his point on the limits of each agency, and asked that it be gazetted immediately.
He admitted that there were some form of ambiguity in the law, prompting the clashes and attempted to delineate the line of responsibilities for each of the agencies.
The new president stressed that the NUPRC shall be the exclusive technical and commercial regulator in respect of upstream petroleum operations and facilities, while the NMDPRA shall be the exclusive technical and commercial regulator in respect of petroleum operations and facilities from the exit of the crude export terminals and the entry gate of the natural gas processing plants.
“The above-mentioned subject matter and related correspondences refers. In delineating the responsibilities of the NUPRC and NMDPRA, certain provisions of the PIA have inadvertently created ambiguity and overlap in regulatory scope.
“The recent issuance of conflicting directives to lease/license holders has created uncertainty in the regulatory and operating environment in this critical sector to the Nigerian economy.
“To facilitate a conducive operating and investment climate pending clarifying amendments to the PIA, I hereby direct as follows: NUPRC shall be the exclusive technical and commercial regulator in respect of upstream petroleum operations and facilities.
“This responsibility encompasses the licensing, administration, monitoring of petroleum facilities that are operationally linked from extraction to and including crude export terminals and the gate of the natural gas processing plant,” the letter dated June 26, stated.
On the other hand, it added: “NMDPRA shall be the exclusive technical and commercial regulator in respect of petroleum operations and facilities from the exit of the crude export terminals and the entry gate of the natural gas processing plant.
“In accordance with Section 318 of the PIA, integrated upstream and midstream petroleum operations shall be considered as upstream petroleum operations. Consequently, pursuant to Section 8(d) of the PIA, NUPRC shall have sole jurisdiction over the technical and commercial regulation of integrated petroleum facilities for upstream petroleum operations.”
The president maintained that the determination of whether petroleum facilities qualify as integrated facilities shall rest solely with NUPRC.
He added that clear guidelines and criteria shall be established by NUPRC to ascertain the integration status of facilities and ensure consistent application of the criteria.
Tinubu urged the NUPRC and the NMDPRA to immediately comply with the directives and ensure that no duplication of regulatory responsibilities occurs henceforth across any activity.
“This includes refraining from overlapping regulatory functions relating to activities leading up to and including export terminal operations,” he pointed out.
The president further highlighted that the directives have implications for staff deployment and financial sustainability of the NMDPRA.
“The ACE NMDPRA, CCE NUPRC and the Special Adviser to the President on Energy, under the auspices of the Chief of Staff to the President, shall resolve to work out the modalities and proffer solutions, including potential amendments to the PIA. I hereby request that this is published in the Federal Government Gazette,” the memo concluded.
