A LEGAL APPRAISAL OF THE PETROLEUM LICENCING REGIME UNDER THE NIGERIAN PETROLEUM INDUSTRY ACT, 2021

Abstract

In the Pre-PIA era, licensing regime was largely regulated by the Petroleum Act, 1969, which vested excessive power on the minister in the grant, suspension and revocation of licenses with significant emphasis on oil license as the fulcrum of its licensing regime. However, the PIA, while reaffirming power of licensing changed the narrative by overhauling the entire facets of petroleum licensing regime with diverse plausible reformations. The author relied on doctrinal research methodology to appraise the extant petroleum licensing regime in Nigeria within the framework of the PIA, with a view to ascertaining its viability towards promoting a fair, orderly and competitive commercial environment within the petroleum industry, and found that the PIA introduced several innovations as distinct from the provisions of the Petroleum Act, 1969, such as the significant change in license type nomenclature and categorizing the petroleum sector into three main value chains of the Upstream, Midstream and Downstream sectors, decentralizing the absolute discretion vested on the minister into a shared responsibility with the commission or authority, and streamlining the conduct of license bidding rounds in accordance with the principles of good governance, transparency and sustainable development. The author concludes that the PIA presents a very attractive licensing regime which is tailored towards the optimal achievement of increasing its revenue generation capacity while strengthening its sovereign status in dealings with companies operational in the sector. The author recommended that the intertwined role of the minister and commission should be clearly defined to avoid administrative conflicts, hierarchical uncertainties and contests in decision making process of granting petroleum licenses.