We are back again on the 2nd edition of our Quick Take Series. Today, we will talk about the different agencies/bodies and do an infographic on the licenses under the recently signed Petroleum Industry Act (PIA).
Now, when I think of it, some readers may be unfamiliar with these terms: upstream, midstream and downstream. You would need to get what they mean to understand today’s QR Series, so here is an explainer:
Upstream: Oil at this stage is still under the ground or water, as the case may be. Upstream sector therefore covers exploration and production, searching for crude oil and drilling for it.
Midstream: Voila. Oil has been found. But who transports and keeps it? That is what midstream is for. They are responsible for the transportation and storage of crude oil resources. Think of them as the middlemen between the drillers and the final processors/distributors.
Downstream: Well, the Oil has been transported and stored or tansmitted out for refining? The Downstream is made up of companies engaged in refining and purifying of crude oil, processing of natural gas, marketing, distribution and selling of finished petroleum products (petroleum, diesel, kerosene and cooking gas).
So, a reader of the last edition suggested, using infographics will make for easy reads. BTW, I’m looking for a graphics designer so suggest any good designer you know.
In the meantime, here is my shot at designing an infographic, made with Datawrapper.
Below is an easy-to-reference Then v. Now of agencies impacted by the new PIA.
Before, we used to have:
Now, we have:
Little Brief on what each of the new bodies do:
The Minister of Petroleum:
Who is (s)he?
The Minister of Petroleum is any lucky chap, fortuned to be appointed by the President to sit on the Federal Executive Council as the Minister in charge of Nigeria’s petroleum resources. Currently, the President - Muhammadu Buhari - sits in that capacity.
What does (s)he do?
By the provisions of the PIA, see Section 3, the Minister’s functions generally cover administering government policy in the industry, supervision, reporting, granting and revocation of prospecting and mining licenses, approval of fees, among several administrative and product price control powers. The Minister would be functioning in that capacity, while being advised by other bodies we will highlight below.
The Nigerian Upstream Regulatory Commission
What is the NURCo?
Established by Section 4 of the Act, the NURCo from its name, is the regulatory agency that will take charge of upstream operations in Nigeria’s petroleum industry.
What do they do?
The NURCo’s key functions are highlighted in Sections 7, 8, and 9 of the PIA. The functions generally cover administering the creation and administering of laws and regulations as it affects upstream petroleum operations, and supervise the operations of licensees under the upstream sector, among several other functions. Notably, NURCo is in change of exploring the frontier basins and managing the frontier exploration fund, to realize more oil assets for the Nigerian petroleum industry.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority
What is the MDPRA?
Established by Section 29 of the PIA, similar to what NURCo does for the Upstream sector, the MDPRA is the regulator in charge of Midstream and Downstream operations.
What do they do?
Their general functions are described under Section 32 & 33 of the PIA. This generally covers issuance of regulations, determination of tarriffs, issuance of licensees for midstream and downstream operators, and supervision of consumer protection, among others.
The Nigerian National Petroleum Company Limited
What is the NNPC Limited?
Yeah, we have talked about NNPCo in a previous Newsletter.“ But more on it. The NNPCo is established under Section 53 of the PIA.
What do they do?
Well, the NNPCo’s objective is simple. Or is it? Section 64 and 65 widely provide that NNPCo is expected to act in a commercial role to take charge of petroleum operations and occupy the role of a representative of the government in oil and production sharing contracts.
The Host Communities Development Trusts
What are HCDTs?
Trust you haven’t forgotten these ones too. Also from the piece on Backward Integration, the HCDTs are established by Section 235 of the PIA. Their principal function? Managing the host communities fund, for the benefit of host communities in oil exploration areas.
What do they do?
This is squarely defined under Sections 235, 239, and 241 of the PIA.
Licenses under the PIA
THE UPSTREAM LICENSES
THE MIDSTREAM AND DOWNSTREAM LICENSES
Also, an update on our piece on Put Your Back(ward Integration Policy) In It, where we critiqued some of the provisions under the then-Petroleum Industry Bill. Particularly the Backward Integration Policy.
From the updated Petroleum Industry Act signed, it appears the backward integration policy, which features in Nigeria’s cement and sugar industries will not be making a 3-peat in Nigeria’s oil and gas industry. As reported by Vanguard, that policy has been removed before President Buhari assented the PIB into law.
This is healthy for the oil & gas sector and a win for end-consumers, I’d argue. We have more prospect sustaining competition in the downstream market under the PIA. See Section 210 of the Act.
That’s all on the Quick Take Series for this week. Nigerian Regulations will be back next week!
Have a great weekend.
Do you enjoy reading this Newsletter? Nice! I’m accepting cash donations and you can send them to me on the Abeg App: Abeg Tag @tooni https://abeg.app/
Also, don’t forget to subscribe to get weekly updates on Nigerian regulations and share them with your friends and colleagues.
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Quick Take Series: Petroleum Industry Act (2) - Bodies & Licenses
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Hello guys.
We are back again on the 2nd edition of our Quick Take Series. Today, we will talk about the different agencies/bodies and do an infographic on the licenses under the recently signed Petroleum Industry Act (PIA).
Now, when I think of it, some readers may be unfamiliar with these terms: upstream, midstream and downstream. You would need to get what they mean to understand today’s QR Series, so here is an explainer:
Upstream: Oil at this stage is still under the ground or water, as the case may be. Upstream sector therefore covers exploration and production, searching for crude oil and drilling for it.
Midstream: Voila. Oil has been found. But who transports and keeps it? That is what midstream is for. They are responsible for the transportation and storage of crude oil resources. Think of them as the middlemen between the drillers and the final processors/distributors.
Downstream: Well, the Oil has been transported and stored or tansmitted out for refining? The Downstream is made up of companies engaged in refining and purifying of crude oil, processing of natural gas, marketing, distribution and selling of finished petroleum products (petroleum, diesel, kerosene and cooking gas).
So, a reader of the last edition suggested, using infographics will make for easy reads. BTW, I’m looking for a graphics designer so suggest any good designer you know.
In the meantime, here is my shot at designing an infographic, made with Datawrapper.
Below is an easy-to-reference Then v. Now of agencies impacted by the new PIA.
Before, we used to have:
Now, we have:
Little Brief on what each of the new bodies do:
The Minister of Petroleum:
Who is (s)he?
The Minister of Petroleum is any lucky chap, fortuned to be appointed by the President to sit on the Federal Executive Council as the Minister in charge of Nigeria’s petroleum resources. Currently, the President - Muhammadu Buhari - sits in that capacity.
What does (s)he do?
By the provisions of the PIA, see Section 3, the Minister’s functions generally cover administering government policy in the industry, supervision, reporting, granting and revocation of prospecting and mining licenses, approval of fees, among several administrative and product price control powers. The Minister would be functioning in that capacity, while being advised by other bodies we will highlight below.
The Nigerian Upstream Regulatory Commission
What is the NURCo?
Established by Section 4 of the Act, the NURCo from its name, is the regulatory agency that will take charge of upstream operations in Nigeria’s petroleum industry.
What do they do?
The NURCo’s key functions are highlighted in Sections 7, 8, and 9 of the PIA. The functions generally cover administering the creation and administering of laws and regulations as it affects upstream petroleum operations, and supervise the operations of licensees under the upstream sector, among several other functions. Notably, NURCo is in change of exploring the frontier basins and managing the frontier exploration fund, to realize more oil assets for the Nigerian petroleum industry.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority
What is the MDPRA?
Established by Section 29 of the PIA, similar to what NURCo does for the Upstream sector, the MDPRA is the regulator in charge of Midstream and Downstream operations.
What do they do?
Their general functions are described under Section 32 & 33 of the PIA. This generally covers issuance of regulations, determination of tarriffs, issuance of licensees for midstream and downstream operators, and supervision of consumer protection, among others.
The Nigerian National Petroleum Company Limited
What is the NNPC Limited?
Yeah, we have talked about NNPCo in a previous Newsletter.“ But more on it. The NNPCo is established under Section 53 of the PIA.
What do they do?
Well, the NNPCo’s objective is simple. Or is it? Section 64 and 65 widely provide that NNPCo is expected to act in a commercial role to take charge of petroleum operations and occupy the role of a representative of the government in oil and production sharing contracts.
The Host Communities Development Trusts
What are HCDTs?
Trust you haven’t forgotten these ones too. Also from the piece on Backward Integration, the HCDTs are established by Section 235 of the PIA. Their principal function? Managing the host communities fund, for the benefit of host communities in oil exploration areas.
What do they do?
This is squarely defined under Sections 235, 239, and 241 of the PIA.
Licenses under the PIA
THE UPSTREAM LICENSES
THE MIDSTREAM AND DOWNSTREAM LICENSES
Also, an update on our piece on Put Your Back(ward Integration Policy) In It, where we critiqued some of the provisions under the then-Petroleum Industry Bill. Particularly the Backward Integration Policy.
From the updated Petroleum Industry Act signed, it appears the backward integration policy, which features in Nigeria’s cement and sugar industries will not be making a 3-peat in Nigeria’s oil and gas industry. As reported by Vanguard, that policy has been removed before President Buhari assented the PIB into law.
This is healthy for the oil & gas sector and a win for end-consumers, I’d argue. We have more prospect sustaining competition in the downstream market under the PIA. See Section 210 of the Act.
That’s all on the Quick Take Series for this week. Nigerian Regulations will be back next week!
Have a great weekend.
Do you enjoy reading this Newsletter? Nice! I’m accepting cash donations and you can send them to me on the Abeg App: Abeg Tag @tooni https://abeg.app/
Also, don’t forget to subscribe to get weekly updates on Nigerian regulations and share them with your friends and colleagues.