The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has warned that oil and gas companies operating within free trade zones, export processing zones and other designated areas without appropriate licences or permits would face sanctions under the Petroleum Industry Act (PIA) 2021.
The warning was contained in an industry circular signed by the Acting Chief Executive of the Authority, Abiodun Adeniji, and addressed to managing directors and chief executives of midstream and downstream petroleum companies, petrochemical and fertiliser firms, as well as operators of oil import and export terminals.
According to the regulator, no operator involved in midstream or downstream petroleum activities is exempt from its regulatory oversight regardless of operational location.
The Authority stated that its regulatory mandate covers all midstream and downstream petroleum operations across Nigeria, including the continental shelf, territorial waters, exclusive economic zone, industrial zones, free trade zones and export processing zones.
NMDPRA clarified that all petroleum operations involving refining, processing, storage, bulk transportation, pipelines, gas transportation networks, terminals, jetties, wholesale supply, importation, exportation, distribution and sales of petroleum products and natural gas remain subject to the provisions of the Petroleum Industry Act and regulations issued pursuant to it.
The regulator stressed that operators within free zones and similar designated areas cannot claim exemption from compliance with the PIA.
According to the circular, the operation of any midstream or downstream petroleum facility within a free zone, export processing zone or similar area does not exempt such facilities from the requirements of the law.
It further warned that no individual or company is permitted to establish, construct, operate or undertake any midstream or downstream petroleum activity without obtaining the appropriate licence, permit or authorisation from the Authority in accordance with the PIA.
“In view of the foregoing, any person engaging in midstream and downstream petroleum operations without an appropriate licence, permit or authorisation from the Authority shall be subject to sanctions in accordance with the relevant provisions of the PIA,” the circular stated.
The regulator also referenced Section 48(1) of the Petroleum Industry Act, stating that any government ministry, department or agency whose actions may directly affect midstream and downstream petroleum operations must first consult the Authority before issuing regulations, guidelines, enforcement directives or taking related actions.
According to the circular, the NMDPRA reserves the right to review recommendations from such government institutions and communicate its decision, which must subsequently be complied with.
The Authority further cited Section 309 of the Petroleum Industry Act, which provides that where provisions of any other legislation conflict with the PIA, the provisions of the petroleum law shall prevail.
“The Petroleum Industry Act 2021 was enacted to establish clear, distinct and comprehensive regulatory institutions for the Nigerian petroleum industry,” the circular stated.
It added that pursuant to Sections 29, 31, 32 and 33 of the Act, the NMDPRA remains the statutory regulator responsible for the technical, commercial, operational and licensing regulation of all midstream and downstream petroleum operations in Nigeria.
Industry observers said the latest directive is expected to tighten regulatory scrutiny across Nigeria’s oil and gas sector, particularly within free trade and export processing zones where some operators have historically claimed varying regulatory exemptions.