The enactment of the Petroleum Industry Act 2021 (PIA) reformed the Nigerian petroleum industry from a single regulatory framework that was in effect for more than 50 years to a dual regime by introducing clear distinctions between the streams of petroleum operations and creating two distinct and focused regulators for the upstream value chain and for midstream and downstream.
The objective of this paper is to review the PIA regulatory framework for achieving a path to economic prosperity and sustainable development in Nigeria. Furthermore, the lessons learned and experiences from introducing a new approach and transitioning from a single to a dual regulatory regime also were reviewed.
This paper presents a comprehensive review of the updated regulatory structures, general administration, and functions of regulators to provide a clear focus for industry stakeholders seeking investments opportunities and benefits from the reforms of the PIA. Additionally, the paper compares the provisions of the Petroleum Act of 1969 with those of the PIA. The paper further examines the change programs of the PIA Transition Committee, the scope of work, and the terms of reference for the consultants saddled with handling change management programs. The responses of industry and regulators to the introduction of the new approach also was studied.
The paper found that the PIA addressed the operational deficiencies of the previous regulatory regime by recognizing the distinct streams of the petroleum value chain established through custody transfer. The PIA also provided clear focus for regulators and industry stakeholders in the light of the energy transition, unbundled the licensing system, and entrenched transparency in hydrocarbon accounting.
Despite the clear benefits, change management related to strategic communications, trainings, and transition of industry experience from previous regulatory framework presents some regulatory uncertainty. Recognition of distinct streams for value chain optimization offers advantages and provides a pathway for economic benefits and sustainable development.
Lastly, the paper finds and recommends that any regulatory transitioning, effective implementation of new approaches, and attainment of objectives and benefits of such reforms must be accompanied by a detailed change management program.