Nigeria’s efforts to reform its oil and gas sector are receiving mixed reactions, with industry analysts praising sweeping changes under the Petroleum Industry Act (PIA), while some lawmakers warn that ageing infrastructure and enforcement gaps pose significant risks.
A sector review released Monday by BusinessMetrics commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its approach to implementing the PIA, noting that recent reforms have begun restoring investor confidence, modernising oversight, and improving transparency across the upstream industry.
The report highlights the rapid digitisation of monitoring systems, streamlined regulatory timelines, and clearer fiscal frameworks, saying these initiatives are reshaping Nigeria’s reputation in global capital markets.
“Digital supervision of production, metering accuracy, fiscal obligations, and environmental performance has helped resolve long-standing doubts about data reliability. These tools have reduced reporting delays, enhanced data integrity, and boosted the global credibility of Nigeria’s upstream statistics,” the report stated.
According to the review, the availability of real-time, reliable data is a strong indicator of a trustworthy investment climate, and NUPRC’s digital reforms are encouraging operators and international financiers to commit capital to new field developments.
The report also noted improvements in licensing and approval procedures, which now follow clearer, rules-based processes and involve structured engagement between regulators and operators.
“Defined timelines for approvals, structured consultations with operators, and alignment of regulatory decisions with PIA provisions have created a more efficient operating environment. This allows projects to move faster, reduces administrative bottlenecks, and provides investors with greater clarity on regulatory expectations.”
Fiscal clarity under the PIA is highlighted as a key driver of renewed activity, reviving marginal fields, dormant licences, and attracting both local and international investment.
“The fiscal certainty introduced by the PIA continues to incentivise capital deployment. Upstream investment appetite is gradually returning, driven by the clarity and predictability investors have long demanded,” the report said.
On the gas sector, the review praised enforcement of domestic gas delivery obligations and frameworks for flare-gas commercialisation, describing them as central to Nigeria’s energy transition and economic growth strategy.
“The Commission’s work in gas monetisation is particularly impactful, supporting industrial expansion, stabilising power supply, and positioning gas as a key pillar of Nigeria’s economic transformation,” the report added.
Customer-focused reforms, including improvements to the One-Stop Regulatory Centre, were also highlighted as vital for cutting red tape and easing operational barriers.
“With sustained PIA implementation, Nigeria is better positioned to attract global capital, increase production capacity, and advance long-term energy security,” the review concluded, urging continued discipline and innovation to unlock the sector’s full potential.
Lawmakers Raise Concerns Over Risk From Neglected Oil Assets
While Nigeria’s oil reforms have received widespread praise, pressure is mounting in parliament over what lawmakers describe as slow and inadequate enforcement of critical provisions under the Petroleum Industry Act (PIA), particularly those addressing decommissioning and abandonment of ageing assets.
On Monday, the House of Representatives Ad-hoc Committee on Decommissioning and Abandonment accused upstream and midstream regulators of failing to fulfil statutory duties outlined in the PIA. The committee warned that these enforcement gaps are exposing host communities and public finances to serious environmental and financial risks.
The investigation focuses 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 previous warnings of a $20 billion funding gap and rising liabilities across the sector.
Officials from both regulatory bodies confirmed during the hearing that full implementation of the law has been delayed, citing “legal technicalities” within the Ministry of Justice and issues with the Central Bank of Nigeria regarding the management of escrow accounts.
A regulator’s representative told lawmakers that enforcement has been carried out under Sections 232 and 233 of the PIA, which require operators to submit decommissioning plans as part of their field development applications.
“The NUPRC has strongly enforced Sections 232 and 233 of the PIA 2021. Every field development plan submitted to the NUPRC now includes a provision for a decommissioning and abandonment plan,” he said.
He added that these plans are designed to restore the environment “close to its original state” once assets reach the end of their life cycle.
However, Bassey Ekpenyong, chairman of the committee, criticised regulators for failing to fully operationalise regulations approved over 20 years ago.
“This regulation was approved in 2003. I want to believe it was submitted to the Minister of Justice immediately. Why have legal processes remained unresolved for so long?” Ekpenyong asked.
The committee’s work continues amid growing concerns that neglected pipelines, wells, and facilities could leave local communities and taxpayers responsible for environmental cleanup and safety hazards if decommissioning rules are not properly enforced.
