Nigeria’s push to reshape its oil and gas industry is drawing sharply contrasting reactions, with industry analysts praising sweeping reforms while lawmakers accuse key regulators of failing to enforce critical safety and environmental rules.
A new sector review released on Monday by the BusinessMetrics applauds the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) approach to implementing the Petroleum Industry Act (PIA), noting that reforms in the past year have begun to rebuild investor confidence, modernise oversight and improve transparency across the upstream sector.
The review highlights rapid digitisation of monitoring systems, improved regulatory timelines and clearer fiscal frameworks, saying these changes are already reshaping how Nigeria is viewed by global capital markets.
According to the report, NUPRC’s shift toward digital supervision of production, metering accuracy, fiscal obligations and environmental performance has helped remove long-standing doubts about data reliability.
“These digital tools have reduced reporting delays, improved data integrity and enhanced the global credibility of Nigeria’s upstream statistics,” the organisation stated.
“The availability of reliable, real-time data is one of the strongest indicators of a trustworthy investment climate. NUPRC’s digital reforms are raising confidence among operators and international financiers who rely on transparent information before committing capital to new field developments.”
The review argues that licensing and approval procedures now follow clearer, rules-based processes, with structured engagement between regulators and operators.
“Clearer timelines for approvals, structured consultations with operators and the alignment of regulatory decisions with PIA provisions have created a more efficient operating environment,” it said.
“This is enabling quicker movement on projects, reducing administrative bottlenecks and giving investors greater clarity on regulatory expectations.”
It adds that the fiscal clarity contained in the PIA has encouraged renewed activity around marginal fields, revived dormant licences and attracted fresh commitments from both indigenous and international players.
“The fiscal certainty introduced by the PIA continues to incentivise capital deployment. We are seeing a gradual resurgence in upstream investment appetite, driven by the clarity and predictability that investors have long demanded,” the review stated.
On gas markets, the report commends the enforcement of domestic gas delivery obligations and frameworks for flare-gas commercialisation, describing them as key pillars of Nigeria’s energy transition strategy.
“The Commission’s work in gas monetisation is particularly impactful. It supports industrial expansion, contributes to power stability and positions gas as a central pillar of Nigeria’s economic transformation,” the statement added.
It also cites customer-focused reforms, including improvements to the One-Stop Regulatory Centre as a vital tool for cutting red tape and signalling a willingness to ease operational barriers.
“With sustained implementation of the PIA, Nigeria is better positioned to compete for global capital, increase production capacity and advance long-term energy security,” the organisation noted, urging continued discipline and innovation to unlock the sector’s full potential.
Lawmakers Sound Alarm On Abandonment Risk
Despite the positive appraisal, pressure is mounting in parliament over what lawmakers describe as slow and inadequate enforcement of critical PIA provisions, especially those covering decommissioning and abandonment of ageing assets.
The House of Representatives Ad-hoc Committee on Decommissioning and Abandonment on Monday accused Nigeria’s upstream and midstream regulators of breaching statutory duties laid out in the PIA. The committee claims alleged failures to comply with legal requirements are exposing host communities and public finances to serious environmental risk.
Its investigation is centred on whether operators are creating mandatory financial reserves, including escrow accounts, to cover the cost of dismantling obsolete installations at the end of their operational life. The probe follows warnings over a funding gap estimated at about 20 billion dollars and growing liabilities across the sector.
Officials from both regulators confirmed during the hearing that full implementation of the law has been delayed, citing “legal technicalities” within the Ministry of Justice and issues involving the Central Bank of Nigeria regarding the management of escrow accounts.
In a presentation to lawmakers, the regulator’s representative insisted that enforcement has taken place under Sections 232 and 233 of the PIA, which require operators to include decommissioning plans as part of their field development applications.
“Our response was clear that the NUPRC has strongly enforced the provisions of Section 232 and 233 of the petroleum acts by the PIA 2021 to the extent that every field development plan submitted to the NUPRC now… must include provision of the [D&A] plan,” he said.
He noted that the plans ensure the environment will be restored “close to its original state” once assets reach the end of their life cycle.
However, Bassey Ekpenyong, chairman of the committee, criticised the regulators for failing to fully operationalise regulations approved over 20 years ago.
“The regulation is a regulation that was approved in 2003. And I want to believe that as soon as you did that, you submitted it to the Minister of Justice,” Ekpenyong said, questioning why legal processes have remained unresolved since then.
The committee’s work continues amid rising concerns that neglected pipelines, wells and facilities could leave local communities and taxpayers footing the bill for environmental cleanup and safety hazards if decommissioning rules are not enforced.
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