Nigeria is evaluating a legislative amendment that would empower the state regulator to oversee existing oil contracts instead of the state oil company, NNPC, according to a draft seen by Reuters. This proposed change could significantly alter governance in Africa’s largest oil producer, positioning the regulator as both an overseer and an active participant in the sector, which raises potential conflicts of interest and corporate governance concerns. The amendment targets the 2021 Petroleum Industry Act (PIA), which currently grants NNPC the authority to represent Nigeria’s interests in various commercial oil contracts.
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) would take over this role if the amendment passes. The Attorney General, Lateef Fagbemi, indicated that the amendment is essential to address issues related to revenue diversion from the Federation account, citing structural and legal loopholes in the current PIA framework. He noted that the decline in net oil revenue inflows is significantly linked to statutory leakages and unclear deductions under the existing law. This legislative move reflects Nigeria’s efforts to enhance transparency and efficiency in its oil sector while seeking to maximize revenue for the state.