Background and Introduction of the Petroleum Industry Act, 2021
On 16 August 2021, the President of the Federal Republic of Nigeria assented to the Petroleum Industry Act, 2021 (the “Act”). The key objective of the Act is to restructure and transform the Nigerian oil and gas industry. The Act provides legal, governance, regulatory and fiscal frameworks for the Nigerian oil and gas industry and development of petroleum host communities.
The Act repeals the following laws: Associated Gas Reinjection Act; Hydrocarbon Oil Refineries Act; Motor Spirit (Returns) Act; Nigerian National Petroleum Corporation (“NNPC”) (Projects) Act; NNPC Act (when NNPC ceases to exist under section 54(3) of the Act); Petroleum Products Pricing Regulatory (Establishment) Act; Petroleum Equalisation Fund Act; Petroleum Profit Tax Act (“PPTA”); and Deep Offshore and Inland Basin Production Sharing Contract Act. However, while some of the repeals will take effect from the effective date of the Act, others are contingent upon the occurrence of certain events. The provisions of certain laws are saved until the termination or expiration of all existing oil prospecting licenses and oil mining leases.
The President, in his capacity as the Minister of Petroleum Resources (the “Minister”) has inaugurated a steering committee, to be chaired by the Minister of State, Ministry of Petroleum Incorporated (the “Ministry”), to oversee the process of the implementation of the Act. The steering committee will be responsible for the seamless and timely implementation of the Act and ensure that the new institutions created under the Act have the full capability to deliver their mandates under the Act.
 These include the Petroleum Act, PPTA, Oil Pipelines Act, Deep Offshore and Inland Basin Production Sharing Contract Act.