The Petroleum Industry Act replaces the former Petroleum Act. The new statute indicates that the property and ownership of petroleum within Nigeria and its territorial waters, continental shelf, and exclusive economic zone is vested in the Government of Nigeria.
Regarding the institutional setting, this law:
- Maintains the Minister of Petroleum, which shall formulate, monitor and administer government policy in the petroleum industry;
- Creates the Nigerian Upstream Regulatory Commission, which is responsible for the technical and commercial regulation of upstream petroleum operations;
- Establishes the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which is responsible for the technical and commercial regulation of midstream and downstream petroleum operations;
- Replaces the old structure of Nigerian National Petroleum for a limited liability company called Nigerian National Petroleum Company Limited.
Regarding licenses, this law:
- Maintains the provisions from the former Petroleum Act;
- Establishes the possibility of celebrating joint venture arrangements with the Nigerian National Petroleum Company Limited;
- Indicates different companies should be responsible for upstream, midstream, and downstream operations.
Regarding the operation of gas and petroleum activities, this law indicates:
- Gas flaring or venting is prohibited except in emergencies, for safety reasons or with an exemption granted by the competent authority;
- All licensees shall install metering equipment to measure flared volumes;
- The decommissioning and abandonment of petroleum wells, installations, structures, utilities, plants, and pipelines for petroleum operation on land and offshore shall be conducted following good international practices and guidelines issued by the competent authority;
- Leaseholders must provide a program of activities and their estimated costs for decommissioning and abandonment, which require approval by the competent authority;
- Leaseholders must establish a decommissioning and abandonment fund.