Petroleum Industry Act: How Nigeria’s oil sector is adapting the new regulations

Nigeria's oil and gas industry is undergoing a significant transformation following the recent signing of the Petroleum Industry Act into law. President Muhammadu Buhari's moves to seek administrative structure amendments in the Act are signaling a new chapter for the sector. Dayo Okusami, a Partner at Templars, joined CNBC Africa to discuss how businesses in the industry are adapting to the new regulations and the future of Nigeria's oil and gas ecosystem. President Buhari's actions are sending a clear message to the market and potential investors that the government is committed to moving things along swiftly. While regulatory certainty is crucial for investors, there are still concerns that need to be addressed. The refining process through issuing guidelines and regulations over time will clarify uncertainties in the Act. Despite not being perfect, the Act provides significant incentives for investments in the petroleum industry, such as gas infrastructure and upstream and downstream operations. One of the key challenges facing the industry is host community issues. The provision for host communities in the Petroleum Industry Act has raised discussions on the management of funds allocated to these communities. While additional funding is desirable, the focus should be on effectively managing the existing resources to drive development in these areas. The Act also establishes regulatory commissions for upstream, midstream, and downstream operations. The separation of regulatory functions aims to streamline operations and improve efficiency. The appointment of experienced industry professionals to lead these commissions is expected to enhance collaboration and inclusivity in regulatory processes. The focus will be on avoiding bureaucratic red tape and ensuring a smooth transition to the new regulatory framework. Overall, the Petroleum Industry Act represents a positive step towards attracting investments and improving regulations in Nigeria's oil and gas sector. With the right implementation strategies and effective management of resources, the industry is poised for growth and development in the coming years.