The Nigerian Midstream and Downstream Petroleum Regulatory Authority has warned that oil and gas operators conducting business in free trade zones, export processing zones, and other designated areas without the required licences or permits will face sanctions under the Petroleum Industry Act 2021.
The directive was contained in a circular addressed to managing directors and chief executives of midstream and downstream oil and gas firms, petrochemical and fertiliser companies, as well as operators of oil import and export terminals.
In the circular issued on Monday, the NMDPRA reaffirmed that it remains the statutory regulator responsible for technical, commercial, operational, and licensing matters in Nigeria’s midstream and downstream petroleum sector under the PIA.
The agency’s Acting Chief Executive, Abiodun Adeniji, stressed that no operator engaged in petroleum activities is exempt from the authority’s oversight, irrespective of where the operations are located.
According to the regulator, its mandate extends to all midstream and downstream petroleum operations across Nigeria, including activities carried out on the continental shelf, territorial waters, exclusive economic zone, industrial zones, free trade zones, and export processing zones.
The authority clarified that operations involving refining, processing, storage, bulk transportation, pipelines, gas transportation networks, terminals, jetties, wholesale supply, importation, exportation, distribution, and the sale of petroleum products and natural gas remain subject to its regulatory control.
It specifically warned operators in free zones and similar designated areas against claiming exemption from compliance with the PIA and regulations issued under the law.
The NMDPRA further emphasised that no individual or company is permitted to establish, construct, or operate any midstream or downstream petroleum facility without obtaining the appropriate licence, permit, or authorisation from the authority.
Citing Section 48(1) of the PIA, the regulator noted that any ministry, department, or agency whose actions may affect midstream and downstream petroleum operations must first consult the authority before issuing regulations, guidelines, enforcement directives, or taking related actions.
The latest directive is expected to strengthen regulatory oversight in Nigeria’s oil and gas sector, particularly within free trade and export processing zones where some operators have historically claimed varying regulatory exemptions.
“The operation of any midstream or downstream petroleum facility within a free zone, export processing zone or similar area does not exempt such a facility and its operations from compliance with the provisions of the PIA and regulations made thereunder,” the circular stated.
It added, “No person shall establish, construct, operate or undertake any midstream or downstream petroleum activity except with an appropriate licence, permit or authorisation granted by the Authority in accordance with the PIA.”
According to the circular, the authority also reserves the right to review recommendations from relevant government institutions and communicate decisions that must subsequently be complied with by affected operators.
The regulator further referenced Section 309 of the PIA, which provides that where the provisions of any other law conflict with the PIA, the petroleum law will prevail.
“In view of the foregoing, any person engaging in midstream and downstream petroleum operations without an appropriate licence, permit or authorisation from the Authority shall be subject to sanctions in accordance with the relevant provisions of the PIA,” the circular added.
