AN ANALYSIS OF THE LEGAL IMPLICATION OF THE INNOVATIONS IN THE

PETROLEUM INDUSTRY ACT (PIA), NO.6 OF 2021.

OGBU VINCENT CHIEDOZIE

2018394051

FACULTY OF LAW

NNAMDI AZIKIWE UNIVERSITY

PO BOX AWKA, ANAMBRA STATE

NIGERIA

A RESEARCH PROJECT/LONG ESSAY PRESENTED TO THE FACULTY OF LAW,

NNAMDI AZIKIWE UNIVERSITY, AWKA, IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF BACHELOR OF LAWS (LL.B) DEGREE.

SUPERVISOR:

PROFESSOR HELEN OBIOMA ONYI-OGELLE

JANUARY, 2023
 CERTIFICATION.

This is to certify that this research project/long essay entitled, “AN ANALYSIS OF THE

LEGAL IMPLICATIONS OF THE INNOVATIONS IN THE PETROLEUM

INDUSTRY ACT, NO.6 2021” is an original work of the undergraduate student, OGBU

VINCENT CHIEDOZIE (with Registration Number 2018394051). Be it further certified that

this work has not been submitted, in part or whole, for any degree or examination in any other

university or academic institution and that all the sources used has been indicated and

acknowledged by complete references.

___________________________ _______________

OGBU VINCENT CHIEDOZIE Date

2018394051

(Student).

ii
 APPROVAL.

THIS RESEARCH PROJECT/LONG ESSAY ENTITLED “AN ANALYSIS OF THE

LEGAL IMPLICATIONS OF THE INNOVATIONS IN THE PETROLEUM

INDUSTRY ACT, NO.6 2021” HAS BEEN APPROVED FOR THE FACULTY OF LAW,

NNAMDI AZIKIWE UNIVERSITY, AWKA.

BY

________________________ _______________

PROF. HELEN OBIOMA ONYI-OGELLE Date

(Supervisor)

________________________ _______________

DR. MATTHEW IZUCHUKWU ANUSHIEM Date

(Final Year Project Coordinator)

________________________ _______________

PROF. OGUGUA VICTORIA CHINELO IKPEZE Date

(Dean, Faculty of Law)

________________________ _______________

External Examiner. Date

iii
 DEDICATION.

I dedicate this long essay to my loving parents, Dr. Chukwu and Elder (Mrs.) Dorathy Ogbu,

whose kind sacrifices and life choices have brought me this far, and laid the foundation for me

to have a chance at a career that will hone my intellect, develop my talents, increase my global

exposure and expand my socio-cultural impact on my community. I am grateful for their

support, advice and presence during the pendency of my university education and my work on

this long essay.

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 ACKNOWLEDGEMENTS

First and foremost, my profound gratitude goes to the Almighty God and the Universe for gift

of life, good health, abundant grace and joyful mercies, that aided me in no small measure, to

begin and complete this research project/long essay, without hitches or problems.

I acknowledge the passionate dedication of my amiable Supervisor, Prof. Helen Obioma Onyi-

Ogelle, whose professional insights, constant support, guidance and corrections were done in

a motherly tone. I like to describe my experience in the writing of this long essay vis-à-vis

working with my Supervisor as my most wonderful experience during my stay in the

university. I am deeply appreciative of the enabling environment created by Dean of the Faculty

of Law, Prof. Ogugua V.C Ikpeze, and the diligent hardwork put in by the Final Year Projects

Committee headed by Dr. Matthew Izuchukwu Anushiem, in providing guidance and insights

to the graduating Law class of 2023.

Furthermore, I am immensely grateful for the role my parents (Dr. Chukwu Alexander Ogbu

and Elder Mrs. Dorathy Chukwu Ogbu); and my siblings (Mrs. Juliana Okorie-Eze (neé Ogbu),

Nneka Anthonia Ogbu, Nnaemeka “SirBen” Ogbu, Ifeoma Priscilla Ogbu, Ebuka Collins

“Osmen” Ogbu, and Chiekezie Kingsley Ogbu) played in providing familial moral support.

I am thankful for the lawyers (Partners, Senior Associates and Associates) at the law firms,

such as TEMPLARS, Olaniwun Ajayi LP (OALP) and others, where I had undergone law

internships, whose library provided me the inspiration and material resources to delve into

Energy/Petroleum Law as a field of interest. I am also sincerely grateful for research from

consulting firms like PWC, KPMG, and my senior friends therein whose assistance was key to

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structuring the tone and direction of this long essay. I must commend the efforts of my

esteemed senior friends in United Kingdom (UK) in law firms like Clifford Chance,

Freshfields, Norton Rose Fulbright, and in the United States (USA) in firms like Allen &

Overy, White & Case etc. that provided me with multi-jurisdictional insights on their work

with the Nigerian Petroleum Industry Act for their clients with interests in Nigerian Oil sector.

In the same vein, I am appreciative of the advance information from senior colleagues who

provided me clarity for my long essay. I must specifically mention the likes of Victor Obiora,

Iwuchukwu Jude and Oforbuike Ngwuta whose help aided me to kick-start the writing of my

long essay from a place of knowledge.

In addition, I must acknowledge the role that my Spotify and Apple Podcast apps played in

providing the needed entertainment that made the writing of this long essay less burdensome.

I am appreciative of music albums by Show Dem Camp, Goodgirl LA, Tomi Thomas, Wizkid,

Lojay, Victony, J Hus, Stormzy, Jorja Smith, Drake, Kendrick Lamar, Kanye West, J. Cole;

and podcast episodes by The ProductSchool Podcast, The Product Tribe, The HonestBunch

Podcast, Librivox Audiobooks, etc. that I listened along to, as I worked on my research. I am

also thankful to my Macbook Pro device for making the typing easy and convenient, without

any technical problems such as system crashes or loss of work.

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 TABLE OF CONTENT

Title Page……………………………………………………………………………………. i

Certification…………………………………………………………………………………. ii

Approval…………………………………………………………………………………….. iii

Dedication…………………………………………………………………………………… iv

Acknowledgement…………………………………………………………………………… v

Table of Content…………………………………………………………………………….. vii

Table of Cases……………………………………………………………………………….. xi

List of Statutes……………………………………………………………………..…...…... xii

List of Abbreviations…………………………………………………………….……...…. xiii

Abstract……………………………………………………………………...…….……….. xiv

CHAPTER ONE: INTRODUCTION.

1.1 Background to the Study………………………..……………………………………….. 1

1.2 Statement of the Problem/Research Questions…………………...……………………… 4

1.3 Aim and Objectives of the Study…………………………………………………….…... 6

1.4 Research Methodology…………………………………………………………………... 8

1.5 Scope and Limitations of the Study……………………………...………….………….... 9

1.6 Significance of the Research Study…………………………………………………...… 10

1.7 Organizational Layout………….………………………………………..………..…….. 11

CHAPTER TWO: LITERATURE REVIEW.

2.1 Conceptual Framework…………………..………………………………….…….…..... 12

2.1.1 Licences and Leases……………………………………………..……………...…….. 14

2.1.2 Contractual Arrangements in the Oil/Gas Sector………………..……………………. 15

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2.2 Theoretical Framework

2.2.1 Land Law Theory………………………………………..……………………………. 16

2.2.2 Environmental Law Theory………………………...………………………………… 16

2.3 Review of Relevant Literature …………………………………………………………. 17

2.4 Summary of Literature Review………………………………………………………… 19

CHAPTER THREE: LEGAL AND INSTITUTIONAL FRAMEWORK FOR THE OIL

AND GAS INDUSTRY IN NIGERIA.

3.1 Legal Framework

3.1.1 Petroleum Industry Act…………………………...………………………………… 20

3.1.1(a) Transparent Administration of Upstream Operations: Open Bidding & Publication of

Grants and Concessions…………………………………………………………………….. 20

3.1.1(b) Better Leverage for Midstream & Downstream Petroleum Liquids and Gas

Operations…………………………………………………………………………………… 21

3.1.1(c) Host Communities Development: Panacea for a Troubled Region………………… 22

3.1.1(d) Revamped Petroleum Industry Fiscal Framework………………………………….. 25

3.1.2 Subsidiary Legislations (Regulations & Guidelines) ……..……………………….. 27

3.1.2(a) Regulations by the NUPRC.

3.1.2a(i) Conversion and Renewal (Licences and Leases) Regulations 2022……..………… 27

3.1.2a(ii) Domestic Gas Delivery Obligations Regulations 2022…….…………….……….. 27

3.1.2a(iii) Frontier Basin Exploration Admin. Regulations 2023…………………………… 28

3.1.2a(iv) Nig. Upstream Decommissioning and Abandonment Regulations 2023…………. 28

3.1.2a(v) Gas Flaring, Venting and Methane Emissions (Prevention of Waste and Pollution)

Regulations 2023…………………………………………………...………………………. 29

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3.1.2(b) Regulations and Guidelines by the NMDPRA.

3.1.2b(i) Assignment or Transfer of Licences and Permit Regulations 2023………………. 29

3.1.2b(ii) Midstream Gas Flare Regulations 2023……….………………………………….. 30

3.1.2b(iii) Gas Trading and Settlement Regulations, 2023………………………………….. 30

3.1.2b(iv) National Strategic Stocks Regulations, 2023………….………………………….. 30

3.1.2b(v) Petroleum (Transportation and Shipment) Regulations 2023…………………….. 31

3.1.2b(vi) Midstream and Downstream Env. Remediation Fund Regulations 2023………… 31

3.1.2b(vii) Natural Gas Pipeline Tariff Regulations, 2023……………………………..…… 31

3.1.3 Other related legal provisions ………………………………………………………. 32

3.1.3(a) 1999 Constitution of the Federal Republic of Nigeria.…………………………….. 32

3.1.3(b) Petroleum Profits Tax Act………………………………………………………….. 32

3.1.3(c) Oil Pipelines Act…………………………………………………………..……….. 32

3.1.3(d) Environmental Impact Assessment Act……….……………………………………. 33

3.2 Institutional/Regulatory Agencies Framework

3.2.1 Federal Ministry of Petroleum Resources (“MPR”) ………………………………….. 33

3.2.2 Nigerian Upstream Petroleum Regulatory Commission (“NUPRC”) ………………… 35

3.2.3 Nigerian Midstream and Downstream Petroleum Regulatory Authority (“NMDPRA”) 37

3.2.4 Nigerian Content Development Monitoring Board (“NCDMB”)………………….…. 39

3.2.5 Nigerian Oil Spill Detection and Regulation Agency (“NOSDRA”)……………..….. 40

CHAPTER FOUR: LEGAL IMPLICATIONS OF THE INNOVATIONS IN THE

PETROLEUM INDUSTRY ACT (PIA), NO. 6 OF 2021.

4.1 New Privatized Status of Nigerian National Petroleum Company Limited (NNPCL)…. 43

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4.2 Dual Regulatory Agencies and Clarity in Scope of Regulatory Authority………..……. 44

4.3 Host Community Development Trust Funds: Sustainability and Beneficial Gains.......... 45

4.4 Monetary and Fiscal Policy: Clarity in Taxes and Payments/Remittances……………... 47

4.5 Specialized Industry Focus on Natural Gas Development………………….…………... 50

CHAPTER FIVE: RECOMMENDATIONS AND CONCLUSIONS.

5.1 Conclusions……..………………………………………………………………………. 51

5.2 Recommendations………………………………………………………………………. 52

BIBLIOGRAPHY…………………………………………..……………………..….…… 54

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 TABLE OF CASES.

A-G., Federation v. A-G., Abia State & Ors. (No. 2) (2002) 6 NWLR (pt. 764) 542 at 599. 12

Centre for Oil Pollution Watch v. N.N.P.C (2019) 5 NWLR (Pt. 1666) 518…………...….. 41

CAC v. Seven-Up Bottling Co. (2017) 5 NWLR (Pt. 1558) 258…..………………………. 42

Dec. Oil and Gas Ltd v. Shell Nigeria Gas Ltd (2019) 14 NWLR (Pt. 1692) 273……...….. 33

Ebong v. Securities and Exchange Commission (SEC) (2017) LPELR-43547 (CA)…...…. 42

Finnih v. Imade (1992) 1 NWLR (Pt. 219) 511………………………………………..…… 16

Francis v. Ibitoye (1936) 13 NLR 11……………………………………………………….. 16

Jimmy King (Nig.) Ltd v. U.B.A Plc (2020) 16 NWLR (Pt. 1751) 377……………..……... 16

Mobil Prod. (Nig.) Unltd v. Ayeni (2010) 4 NWLR (Pt. 1185) 586…………………...…… 33

Moses Ediru v. F.R.S.C (2016) 4 NWLR (Pt. 1502) 245……………………………..……. 42

National Oil Spill Detection and Response Agency (NOSDRA) v. Mobil Producing Nigeria

Unlimited (MPNU) (2018) 13 NWLR (Pt. 1636) 334………………………….…..….…… 41

Nigerian Agip Oil Co. Ltd v. Kemmer (2001) 8 NWLR (Pt. 716) 506…………….…..….. 33

N.N.P.C & Anor. v. Famfa Oil Limited (2012) 17 NWLR (Pt. 1328) 148………….…..…. 15

Seleba v. Mobil Prod. (Nig.) Unltd (2006) 12 NWLR (Pt. 995) 634……………………….. 33

Shell Nigerian Exploration Production Company Limited v. National Oil Spill Detection and

Response Agency (NOSDRA) (FHC/L/CS/576/2016)……………..………………………. 42

Statoil (Nig.) Ltd v. Inducon (Nig.) Ltd (2021) 1 NWLR (Pt. 1774) 1………………..…… 15

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 LIST OF STATUTES.

The Constitution of the Federal Republic of Nigeria (“CFRN”) 1999 (as amended).

Companies and Allied Matters Act, No. 3 of 2020

Companies Income Tax Act (“CITA”), Cap. C21 LFN 2004.

Deep Offshore and Inland Basin Production Sharing Contracts Act, Cap. D3 LFN 2004.

Environmental Impact Assessment (“EIA”) Act, Cap

Fiscal Responsibility Act, No. 31 of 2007.

Land Use Act 1978, Cap L5 LFN 2004

Nigeria Oil and Gas Industry Content Development Act, No 2 of 2010

National Safety and Radiation Protection Act, Cap N142 LFN 2004

Repealed Nigerian National Petroleum Corporation (NNPC) Act 1977 No. 33 Cap. N123 LFN

2004.

Repealed Nigerian National Petroleum Corporation (Projects) Act No. 94 of 1993, Cap. N124

LFN 2004.

Oil Pipelines Act (“OPA”) Cap O7 LFN 2004

Petroleum Industry Act (“PIA”), No. 6 of 2021

Petroleum Profits Tax Act (“PPTA”), Cap P13 LFN 2004

The repealed Petroleum Act 1968 Cap. P10 LFN 2004

Public Procurement Act, No. 14 of 2007.

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 LIST OF ABBREVIATIONS.

AFREXIMBANK African Export-Import Bank, Cairo Egypt

CFRN The Constitution of the Federal Republic of Nigeria, 1999

CIT Companies Income Tax (CIT)

FAAC Federal Account Allocation Committee

FDI Foreign Direct Investment

FEC Federal Economic Council

HT Hydrocarbon Tax

JV Joint Venture

NCDMB Nigerian Content Development Monitoring Board

NESREA Nigerian Environmental Standards Regulatory Enforcement Agency

NMDPRA Nigerian Midstream & Downstream Petroleum Regulatory Authority

NNPCL Nigerian National Petroleum Corporation Limited

NOSDRA Nigerian Oil Spill Detection and Regulation Agency

NUPRC Nigerian Upstream Petroleum Regulatory Commission

NWLR Nigerian Weekly Law Reports

OGIC The Oil and Gas Sector Reform Implementation Committee

PEL Petroleum Exploration Licence

PIA Petroleum Industry Act, No. 6 of 2021

PML Petroleum Mining Lease

PPL Petroleum Prospecting Licence

PSC Production Sharing Contracts

RMAFC Revenue Mobilisation Allocation Fiscal Commission

SWF Sovereign Wealth Fund

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 ABSTRACT.

The enactment of a sectoral reform bill for modernizing the oil and gas industry landscape in
Nigeria has remained a political dilemma and pathetically seemed a legal impossibility, for an
extended timeline nearing 20 years. There was an array of roadblocks mounted against it seeing
the light of the day: socio-political differences, ethnic agitations, Niger-Delta host
communities’ concerns, vested militating interests of International Oil Companies (IOCs) &
local operators, lack of consensus amongst stakeholders, and other opposing factors. The
emergence of the Act and its’ promised implementation can represent the catalyst for the
optimal growth of the sector in Nigeria through efficient natural resource management, with
provided for, separate roles for the domain subsectors; the existence of a commercially-
oriented and profit-driven national petroleum company; the codification of transparency in the
administration of the oil resources; economic and social development of host communities;
environmental remediation and a business environment conducive for petroleum operations to
thrive. This study is prompted along the sole aim of x-raying the innovations pioneered by the
Act across its regulatory, institutional, operational, fiscal/monetary and social provisions, and
their legal impact on the government regulators, petroleum industry players and other relevant
stakeholders. The objectives of the study comprise presenting a status overview of the Nigerian
petroleum industry landscape; showcase the previous legal regime (laws and institutions) that
the industry operated with; appraise the nascent provisions in the PIA; and critique the
compliance of stakeholders (government, agencies and operators) in implementing the Act. In
achieving the aforementioned research intentions, this study utilized the doctrinal research
methodology, essentially, a conceptual/library-based research into the interpretation,
descriptive analysis and systemization of the legal principles and norms enshrined in the
Petroleum Industry Act. The author in the course of this approach examined, appraised,
critiqued and evaluated the existing legislation and the attendant commentaries on, to produce
qualitative analysis. The findings of this study showcase that while regulatory and governance
issues were addressed by the Act, there is no real socio-economic impact on the lives of
ordinary Nigerians. The research study further reveals that the PIA solves old problems
plaguing the oil sector, but inadvertently creates new issues. The author recommends through
this study the use of technological innovations in regulatory monitoring; stringent transparency
and an increased direct participation of the Nigerian citizenry in the exploitation of resources.

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