Comparative Analysis of Best-In-Class Regulatory Frameworks Implemented in the Petroleum Industry vis-à-vis the Petroleum Industry Act, 2021

Abstract The passage of the Petroleum Industry Act 2021 (PIA) transformed the Nigerian petroleum regulatory landscape from being oversighted by a single regulator; a task that was largely regulated by the defunct Department of Petroleum Resources (DPR) to a dual regulatory landscape based on value chain administration. Upstream operations are exclusively regulated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) while mid and downstream operations are exclusively regulated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). This paper examines the economic benefits of the regulatory philosophy enshrined in the PIA and comparatively examines this philosophy vis-à-vis other possible regulatory philosophies to evaluate the most viable regulatory structure for the Nigeria Petroleum Industry. It was established that irrespective of the choice of regulatory framework, the clear separation of streams on the petroleum value chain that was established by custody transfer between them, which was presented by the PIA as its regulatory structure, is the philosophy with economic advantages that should be sacrosanct for any regulatory framework of choice. Moreover, mitigation strategies to reduce regulatory overlaps/conflicts in the implementation of the PIA were proposed given the concerns raised by stakeholders on ease of doing business. Finally, this paper recommends that the development and choice of regulatory frameworks should hinge squarely on critical factors such as the economic benefits to the country, expected long term objectives, clear and unbiased delineation of responsibilities, change management implementation, policy consistency and efficient data management.