Petroleum Industry Act, no. 6 of 2021.

This Act, consisting of 319 articles, divided into five chapters, aims at providing legal, governance, regulatory and fiscal framework for the petroleum industry and the development of host communities. The first chapter concerns governance and institutions. The Act vests the Federal Government with the property of petroleum within the whole country and defines the following objectives: establishing a framework for the creation of a commercially oriented national petroleum company; making institutions efficient with separate roles for petroleum industry, more transparency and accountability in the administration of petroleum resources and deepening local content practice in the oil industry.
The Act defines the powers of the Minister, establishes the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Petroleum Regulatory Authority. The Act empowers the Commission to dispose of property, to administrate technical and commercial petrol operations with specific regulatory functions, to enforce provisions, to set standards and issue guidelines, aiming at promoting healthy and efficient conduct of upstream petroleum operations in an environmentally sustainable manner. Specific functions, related to the development of exploration strategies and the undertaking of studies and analysis, concern the Commission functions’ with respect to frontier basins. The Act defines bodies of the Commission and their powers and functions (the Board, the Secretary, the Special Investigation Unit). The Act empowers the Authority to regulate and monitor technical and commercial petroleum operations, to determine appropriate tariff and price framework concerning natural gas, oil and its storage and transport, with specific regulatory functions. The Act defines bodies of the Authority (the governing board, the Authority chief executive and the Directors, the Secretary) their powers and functions. Special powers of the Authority concern: inspection, examination, surveillance on petroleum and gas installation, power of entry any plant or premise, taking samples.
The second chapter concerns general administration, administration of upstream, midstream and downstream petroleum operations and their impact on the environment, administration of gas operations, administration of midstream and downstream petroleum liquid operations. Matters covered by this chapter include: management of petroleum resources, guidelines on leases and licenses and list of activities requiring a license, prohibited activities, tariff methodology, storage and transportation of gas, customer protection, radioactive materials treatment, offences and penalties.
The third chapter concerns host communities development and aims at: creating a framework to support the development of host communities; providing social and economic benefits from petroleum operations to host communities; enhancing peaceful coexistence between licensees or lessees and host communities. The Act provides for the creation, definition and management of a development trust for host communities, with peculiar attention to the support of local initiatives concerning security and protection of environment.
The fourth chapter concerns the establishment of a petroleum industry fiscal framework, in order to encourage investment in the Nigerian petroleum industry, expand the revenue base of the Federal Government, simplify the administration of petroleum tax. Matters covered by this chapter include: the creation of the hydrocarbon tax and related deductions; persons and companies chargeable; appeals to the tax tribunal; offences and penalties; application of companies income tax to petroleum operations.
The fifth chapter concerns miscellaneous provisions, including: transfer of employees and existing host communities development projects; interpretation of the following relevant terms: associated gas, chargeable oil, company, corrupt practices, crude oil, customer protection, deep offshore, exploration well, frontier basin, host communities, midstream and downstream gas and petroleum operations.