November 29, 2021
THE PETROLEUM INDUSTRY ACT 2021 (KMO LEGAL NEWSLETTER – NOVEMBER 2021)
THE PETROLEUM INDUSTRY ACT 2021: REQUIREMENTS FOR INVESTING IN THE NIGERIAN PETROLUEM INDUSTRY
By Ruth Nwankwo (Associate)
INTRODUCTION
The Petroleum Industry Act 2021 (PIA) is now the uniform legal framework in the Petroleum Industry in Nigeria. The PIA provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry and the development of host communities. This article highlights salient provisions and steps a potential investor (local or foreign) needs to take into cognizance.
- There are two main regulators in the Nigerian Petroleum Industry: the Nigerian Upstream Regulatory Commission (the Commission) for regulating upstream petroleum operations and the Nigerian Midstream and the Downstream Petroleum Regulatory Authority (the Authority) for regulating midstream and downstream petroleum operations.
- To engage in upstream petroleum operations, in addition to being an incorporated company in Nigeria, the following licenses and lease must be obtained from the Commission:
- Petroleum exploration license: it gives the holder the non-exclusive right to carry out petroleum exploration for 3 years. It is renewable for additional 3 years upon fulfilment of prescribed conditions and does not include the right to win, extract, or carry away any petroleum discovered in the licensed area.
