On 7 August, 2023, the President issued policy directives to clarify responsibility for the management and control of crude oil export terminals. The Notice of Presidential Directives (“the Notice”) on the delineation of regulatory oversight between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC or “the Commission”) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) grants the oversight power on export terminals to the NUPRC. The Notice also reiterates that the NUPRC shall have responsibility for regulating integrated upstream and midstream petroleum operations.
Commentaries
The Notice has resolved the lingering dispute between the NUPRC and the NMDPRA since the enactment of the Petroleum Industry Act (PIA) on 16 August, 2021. The dispute had created unnecessary operational challenges to the seamless implementation of the PIA. The clarification will certainly help to accelerate the achievement of the two key objectives of the PIA, which are to foster a business environment conducive for petroleum operations and promote transparency, good governance, and accountability in the administration of petroleum resources.
The grant of oversight responsibility over crude oil export terminals to the Commission is the right thing to do as such terminals form part of upstream operations. However, the Notice has raised a fundamental legal issue –can presidential directives, even though gazetted, override the provisions of the Act of the National Assembly (NA)? The Court has always ruled that regulations or any other administrative instrument derive their powers from the extant law and are, therefore, subject to the law. To the extent that such regulations or instrument are inconsistent with the enabling Act, they will be invalid. It would, therefore, seem that the only way to legally resolve the dispute is to amend the PIA to reflect the contents of the Notice.
