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June 6, 2023

NMDPRA issues 6 new regulations, sets March 31 deadline for permits

Key highlights

  • The NMDPRA has issued new guidelines for stakeholders in the oil and gas industry.
  • The guidelines were drafted in line with the provisions of the Petroleum Industry Act of 2021.
  • The NMDPRA has given a March 31 deadline for registration and business permit issuance.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued six new regulations to guide the oil and gas industry.

The agency has also set a March 31 deadline for permit issuances for those stakeholders who want to do business with the NMDPRA.

The new NMDPRA’s regulations

The new regulations, which were recently announced at an event, are as follows:

  • Midstream and Downstream Petroleum Operations
  • Petroleum Measurement Regulations
  • Assignment or Transfer of Licence and Permit
  • Natural Gas Pipeline Tariffs, Gas Pricing
  • Domestic Demand and Delivery
  • Petroleum/Transportation and Shipment

According to the NMDPRA, these new guidelines were issued following directives from the Petroleum Industry Act (PIA), which will enable growth in the industry based on regulatory clarity, certainty, fairness, transparency, and best industry standards.

What NMDPRA boss said about the new regulations

During the event marking the announcement of the new guidelines, NMDPRA Chief Executive, Mr Farouk Ahmed, said that all stakeholders should note that with effect from March 31st, 2023, any company desiring to do business with the agency must be registered and issued a permit.

He also said that in addition to the 6 regulations being launched, 14 other regulations have been developed and will be issued shortly, making a total of twenty new regulations.

Mr Ahmed also launched the Midstream and Downstream Oil and Gas Industry Service Permit (MDOGISP) Portal to harmonise all service providers for the industry. Stakeholders aspiring to do business with the NMDPRA should endeavour to register using the portal before the stated deadline.

Licenses, permits and sanctions: During the event, the NMDPRA Secretary/Legal Adviser, Dr. Joseph Tolorunse, said the guidelines will provide procedures for the granting of licences, permits, authorisations and payment of fees as well as proffering sanctions and penalties for non-compliance.

The new guidelines will also extend to the importation, exportation, shipping, unshipping, and landing of petroleum, petroleum liquids, and products, conformity assessment as well as technology adaptation.

Measuring guidelines to drive revenues

Dr Tolorunse also highlighted the fact that it is important for companies to install measurement instruments at appropriate points of all oil and gas operations. He further stated that this will help to determine the basis for calculating revenue accruing to the government, licensees, contractors, and other parties in the midstream and downstream petroleum operations.

What you should know

The Petroleum Industry Act (PIA) introduces a new tax regime, replacing the existing petroleum profits tax with a hydrocarbon tax and introducing a tax on the income of oil companies. Under this new fiscal regime, hydrocarbons—including crude oil, condensates, and natural gas liquids produced from associated gas—will be subject to taxation.

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