The Petroleum Industry Act (PIA) empowers the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the “Authority” / ”NMDPRA”) to issue licenses and permits for the transportation and storage of crude oil (midstream), and the conversion of crude oil into finished products (downstream) to licence or permit holders (Regulated Entity(ies)) in the Nigerian oil and gas industry.
The NMDPRA, pursuant to its powers under the PIA issued the Assignment or Transfer of Licence and Permit Regulations (the “Regulations”) effective from 27 February 2023. The Regulations were issued pursuant to Section 117(1) of the PIA which provides that the holder of a midstream or downstream license or permit shall not transfer its license or permit or any rights or obligation arising therefrom without the prior written consent of the Authority.
Highlight of the Key Provisions of the Regulations
- Regulated Transfers of Licenses and Permits
The following would require approval of the Authority under the Regulations: (i) a merger of two or more companies, one of which is a Regulated Entity; (ii) acquisition of a Regulated Entity or its assets; (iii) an assignment or transfer of the licence/permit to a company in a group of companies, in which the Regulated Entity is a member for the purpose of reorganisation of the group of companies; (iv) an assignment or transfer of a licence or permit to a new company, (v) testamentary disposition; (vi) or by reason of change in ownership of shares in the Regulated Entity.
The Authority may expand the classes of regulated transfers listed above from time to time. The Regulations empower the Authority to issue guidelines and directives for the effective implementation of its provisions.
- Approval for Change of name of a licensee or permit holder
A Regulated Entity must obtain the approval of the Authority before effecting a change of name whether by way of corporate restructure or rebranding or otherwise.
Commentary on the Assignment or Transfer of Licence and Permit Regulations, 2023 – Download Full Publication