Power & Energy

Petroleum Industry Act 2021

20-year reform of Nigerian oil & gas governance — incorporates NNPCL, restructures fiscal terms, creates host community trusts.

Signed
2021-08-16
Status
In force

1 Background

The PIA was 20 years in gestation and finally passed in 2021. It restructured the entire oil & gas governance regime: NNPC was incorporated as Nigerian National Petroleum Company Limited (NNPCL) under CAMA; the fiscal regime was restructured with new royalty and hydrocarbon tax provisions; the regulator was split into the Nigerian Upstream Petroleum Regulatory Commission and the Midstream and Downstream Petroleum Regulatory Authority; and host communities became entitled to a 3% trust fund of operating expenditure.

2 Key provisions (6)

01
NNPC incorporated as NNPC Limited (NNPCL) under CAMA — a commercial entity
02
Regulator split: NUPRC (upstream) + NMDPRA (midstream/downstream)
03
Host Community Development Trust — 3% of OPEX from upstream operators
04
New hydrocarbon tax replacing some petroleum profits tax provisions
05
Gas flaring phase-out timeline codified
06
Frontier exploration fund (10% of NNPCL profit ringfenced)

3 What changed in practice

NNPC now publishes audited accounts (first audited statements 2023)
Subsidy framework was preserved by PIA — its removal in 2023 was an executive decision
3% host community fund operational in Niger Delta
Several IOCs (Shell, ExxonMobil) accelerated divestments to local players after PIA passed

4 Who it affects

Oil & gas operatorsHost communitiesNNPCLIOCs

5 What it repealed / replaced

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