NMDPRA Harps On Imperative Of Regulatory Compliance In Nigeria’s Oil Sector
Juliet Ukanwosu
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has insisted that it is imperative for oil companies to adopt regulatory compliance as a critical element of their organizational and business culture.
The NMDPRA stressed that compliance should not be reactive or be viewed as a business risk but rather as an integral part of business philosophy.
The Executive Secretary of NMDPRA, Engr. Farouk Ahmed while speaking in Abuja, at the general counsel and legal advisers’ forum for midstream and downstream petroleum companies in Nigeria on the topic: “NMDPRA advancing a collaborative compliance culture in Nigeria’s midstream and downstream petroleum sectors,” urged companies to internalize the fact that regulatory provisions are made to enable businesses sustainability and to facilitate responsible operations.
“It is therefore, imperative for companies to adopt regulatory compliance as a critical element of their organizational and business culture. Compliance should not be reactive or be viewed as a business risk but rather as an integral part of business philosophy,” Engr. Ahmed said.
Engr. Ahmed pointed out that the oil and gas sector requires a unified compliance culture rooted in robust and enabling legal frameworks, transparency, accountability, and shared responsibility, adding that the role of legal practitioners is critical across the midstream and downstream energy business value chain including the promotion of optimal regulatory compliance to all set rules and standards of operations in the ever-complex operational and volatile market environment.
He further expressed the hope that strategic and pragmatic solutions will be established at the forum which will enhance the overall performance of the midstream and downstream sector as stakeholders all work towards the creation of shared value for investors and most importantly the extensive market of Nigeria and the West African sub-region.
He said: “Learned Counsels, the Petroleum Industry Act 2021 has fundamentally restructured Nigeria’s petroleum industry by delineating regulatory responsibilities of our industry into the upstream and the midstream and downstream petroleum operations. The Act prescribes that all operations in the midstream and downstream sector can only be conducted under appropriate licenses, permits and authorizations granted by the NMDPRA and the Authority is fully guided by the provisions of the law in providing regulatory oversight of the Industry.
“We note and thank all of you for your effective participation and contributions in all the stakeholder consultative sessions that we have held over the years. which has led to the issuance of all the regulations that have been gazetted for our sector.”
The NMDPRA chief revealed that as a result of the feedback received from stakeholders on the need to strengthen regulatory compliance through simplified and clearer regulations for the midstream and downstream operations, the agency is implementing an inclusive stakeholder process of streamlining the gazetted and published regulations to mitigate the complexities of navigating and implementing numerous regulations.
Engr. Ahmed further explained that the Authority is also ensuring the elimination of inconsistencies and repetitions across multiple regulations; streamlining regulatory processes for ease of business to encourage investments.
He urged the forum to critically review and make recommendations on the regulations to enable the Authority improve the overall compliance of operators and the performance of the regulatory instruments – legal frameworks and licenses – in the midstream and downstream sector.
“When we issue regulatory instruments, we require effective compliance. It is compliance with extant provisions of the law that allows continuity of operations and the grant or renewal of licences. We enforce compliance to ensure that operations are conducted safely, the environment and consumers are protected, and fair play is observed in the industry,” Ahmed said, adding however, that effective compliance is a result of effective collaboration critical to fostering ease of doing business, investor confidence and sustainable operations.
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