Experts urge FG to enforce strict compliance with provisions of PIA, encourage oil firms to seek deep understanding of act

Samuel Agbelusi

The Nigerian Government has been charged to implement strict compliance measures and sanctions on every player and international oil companies (IOCs) that flout regulatory provisions of the Petroleum Industry Act(PIA), while oil and gas companies operating in Nigeria have been encouraged to comprehensively review the provisions of the act, vis a vis their operations and compliance.

These were some of the views expressed by experts in a conversation with EnergyDay on the sideline of the decision of the Senate committee’s investigation of the non-compliance with the Petroleum Industry Act and the Oil Mining Lease.

EnergyDay recalled that since the Petroleum Industry Act was signed into law on 16 August 2021, there have been reported cases of violation even after implementation.

It is in an attempt to mitigate against further violations of the provisions of the act that the Senate leadership headed by Senator Ahmed Lawan, President of the Senate, recently, set up a seven-member panel.

The committee headed by the Senate Deputy Chief Whip, Senator Sabi Aliyu Abdullahi was tasked to investigate the wrongs and expose actions in the oil and gas sector.

Shell Petroleum Development Company (SPDC) was alleged of violating the Petroleum Act especially as it pertains to the Joint Venture Agreement signed with the Federal Government with a refund of $200 million including penalties and interests under the agreements to the federal government.

Industry experts believed that most of the operators have gotten used to the obsolete laws and regulations in the Nigeria oil and gas industry which give them the privilege of non-compliance. They added that the country has lost Foreign Direct Investments(FDI) due to a lack of coordination in the sector.

They explained that the PIA stipulates several other compliance requirements for industry operators, adding that some key compliance requirements in the new oil and gas industry act must be understood by industry players.

Lanre Afuye, Oil, Gas, and Power Practice Manager at Andersen in Nigeria, has charged companies to be proactive and comprehensive in reviewing the PIA to ascertain how the PIA impacts their operations from a compliance and operational perspective. He said that operators must keep themselves abreast of developments in the industry.

He said, “The timelines for compliance with some of the provisions of the PIA are yet to be specified. We expect these timelines to be indicated in the regulations to be issued pursuant to the PIA, in due course. As such, in this regard

In a phone conversation with EnergyDay, Mrs. Yinka Adelaide, an Energy lawyer with Liss Chambers, commended the Senate for setting up a committee to look into the violations of PIA by various companies.

She insisted that thorough investigations need to be done to ensure that strict measures should be implemented to put a stop to the violations and that companies found guilty should be sanctioned as a deterrent to others.

“The Petroleum Industry Act was passed into law to address a lot of concerns which were very common in the oil and gas industry. Our continued loss in Oil revenue is due to the corrupt activities that have overwhelmed the sector.

“The activities of the ministry of petroleum resources and companies involved should be looked into in respect of the act, ”she added.

Speaking with Mr. Deji Ojo, a petroleum engineer at BOVAS, an oil and gas company in Nigeria, stressed that the senate did well to set up a panel to investigate the actions that contradict the laid down rules of the Petroleum Industry Act.

Ojo stated that corrupt activities are facing the industry which is making it hard for the easy implementation of the act and that strict measures should be identified as a way for those found guilty.

The experts, however, suggested a regular high-level engagement between stakeholders, regulators, and other critical stakeholders with the idea of focusing on the realistic strategy required to ensure near compliance with the Petroleum Industry Act.