PETROLEUM ACT
Act · Energy
Policy date: 2021-01-01
An Act establishes the licensing regime for petroleum exploration and production in Nigeria. It targets oil companies and federal regulators. This ensures government ownership and adherence to environmental standards.
PETROLEUM ACT
What Is This Policy?
The foundational legislation that governed the exploration, prospecting, working, and winning of petroleum in Nigeria, establishing the licensing regime and vesting all petroleum in the State.
Who Does It Target?
Oil and gas exploration and production companies Petroleum product importers and exporters Department of Petroleum Resources (now NUPRC) Federal Government as owner of petroleum resources
What Does It Aim to Achieve?
Assert Federal Government ownership of all petroleum in Nigeria, regulate petroleum operations through a licensing framework, and ensure adherence to safety and environmental standards.
Key Features
State Ownership: Vests all petroleum resources in, under, or upon any land in Nigeria in the State (Federal Government). Licensing Regime: Establishes Oil Prospecting Licences (OPLs) and Oil Mining Leases (OMLs) as the basis for petroleum operations. Regulatory Framework: Empowers the Minister of Petroleum to make regulations covering operations, safety, and environmental standards. Penalties: Prescribes criminal penalties for unlicensed petroleum operations.
Current Status
Rollout Stage: Partially superseded by the Petroleum Industry Act 2021 for new licensing Coverage: Nationwide, including offshore petroleum operations Beneficiaries: Federal Government revenue; petroleum industry operators Funding: Oil and gas royalties and taxes payable to the Federation Account
How to Access
Oil companies must hold valid OPLs or OMLs to operate Applications were made to the Department of Petroleum Resources (now NUPRC under PIA 2021) Application method: New licences are now issued under the Petroleum Industry Act 2021 through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Important Terms
Existing licences granted under the Petroleum Act remain valid under PIA 2021 transition provisions Petroleum operations without a licence attract prosecution Environmental damage liability applies to all licensees
Official Resources
Website: https://www.nuprc.gov.ng Contact: Nigerian Upstream Petroleum Regulatory Commission (NUPRC)
Legal Framework
The Petroleum Act 1969 was the foundational legislation governing Nigeria's petroleum sector until superseded by the Petroleum Industry Act 2021. It derived constitutional authority from Section 44(3) of the 1999 Constitution and established the legal framework for petroleum licensing and operations. The PIA 2021 replaced and consolidated the Petroleum Act, the NNPC Act, and related petroleum statutes into a comprehensive modern framework.