As discussions intensify around potential revisions to Nigeria’s Petroleum Industry Act (PIA), industry experts are advocating for the Nigerian Upstream Investment Management Services (NUIMS) to be detached from the Nigerian National Petroleum Company (NNPC). This move is seen as essential to boosting transparency and operational efficiency within the sector.
The call for separation comes amid government plans to amend certain provisions of the 2021 PIA, a law initially designed to clarify roles within Nigeria’s oil and gas industry but which still leaves some ambiguities unresolved.
Ademola Henry Adigun, CEO of AHA Consultancies, stressed that NUIMS should not continue as a subdivision of NNPC but should instead function autonomously, preferably under the Ministry of Finance. He believes this restructuring would enhance transparency and curb the inefficiencies and corruption often linked to the current framework. Adigun stated, “NUIMS ought to have been positioned under the Ministry of Finance from the start. This would have ensured better management and greater clarity over asset ownership.” He cautioned against conflating regulatory and operational roles, emphasizing, “A regulator cannot simultaneously be an operator,” highlighting the dangers of merging these functions further.
In an interview with LEADERSHIP, Adigun questioned the rationale behind the proposed amendments, pointing out that the PIA took years to enact and remains inadequately implemented. He asked, “What is the driving force behind these changes? Is it ownership structure, transparency concerns, or a misunderstanding of the law’s intent?”
He further argued that before considering amendments, the government should focus on implementing the existing law effectively. “The fundamental issue is that the regulator should remain distinct from the operator. The initial step should have been to separate NUIMS from NNPC and place it under the Ministry of Finance, which would have ensured better oversight and transparency. Instead, the current proposal risks repeating past mistakes.”
Adigun also speculated on government intentions, suggesting that the move might be linked to plans for divesting Nigerian equity in petroleum assets. “The real agenda appears to be divestment. Ownership changes alone won’t attract investment; what matters are fiscal policies, the investment climate, and governance structures.”
He recommended that to improve the industry, the government should maintain clear distinctions between regulators and operators. “If ownership restructuring is necessary, NUIMS should be separated from NNPC. Currently, NUIMS lacks dedicated staff and is embedded within a system plagued by corruption and inefficiency, making it costly and ineffective.”
Captain Emmanuel Iheanacho, Executive Chairman of Integrated Oil and Gas Ltd and Genesis Shipping Worldwide, expressed support for refining the law where necessary to enhance transparency and efficiency. However, Iheanacho, a former Minister of the Interior and Distinguished Maritime Personality, urged caution to avoid hasty amendments that could undermine the law’s recent implementation.
He acknowledged that revisiting the PIA is acceptable if justified by emerging needs but stressed the importance of thorough evaluation before making changes.
Mrs. Nneka Zainabu Obi, Managing Director of DEEPSHORES Energy Limited, warned that introducing additional bureaucratic layers could politicize decision-making and deter investors. “In a country already battling negative perceptions, complicating the regulatory environment risks driving away potential investors seeking stability.”
She noted that the PIA had positioned Nigeria as an attractive investment destination and questioned the necessity of amendments that might decentralize power but slow down business operations. “For indigenous companies, this could mean longer decision-making processes and increased challenges.” She urged, “Let the PIA stand as it is and allow regulators to perform their roles without undue interference.”
Energy lawyer Chukwuebuka Ibeh criticized the proposal to make the Ministry of Finance (MOFI) the sole shareholder and agent of NNPCL. He argued that MOFI’s expertise lies in financial management, not in the technical or commercial aspects of running a national oil company. “Placing NNPCL entirely under MOFI risks prioritizing revenue extraction over building sustainable operational capabilities,” he said.
Ibeh warned that this approach undermines the necessary checks and balances, reducing NNPCL’s independence and credibility. “Politicizing decisions related to contracts, investments, or project execution will weaken governance and discourage the investments Nigeria needs, especially in deepwater and frontier exploration.”
He emphasized that investors seek clarity, predictability, and professionalism. “If NNPCL is viewed merely as a government revenue tool rather than a commercially driven partner, capital will flow elsewhere.”
Instead of relegating NNPCL to a subsidiary of MOFI, Ibeh advocated for strengthening existing systems, enhancing fiscal oversight, enforcing transparency in cost recovery and production reporting, and empowering regulators to hold operators accountable impartially. “Nigeria should focus on building institutional credibility rather than weakening it through conflicting mandates.”
He highlighted that successful national oil companies worldwide balance commercial agility with clear separation from regulators and political interference-a direction Nigeria was moving toward with the 2021 PIA. “Reversing these reforms risks damaging Nigeria’s reputation and undermining efforts to create a transparent, investment-friendly industry.”
Ibeh cautioned that if the amendment passes as proposed, it would signal a retreat from Nigeria’s commitment to a strong, independent NNPCL, potentially transforming it into a politically controlled revenue collector rather than a competitive global player. “The government must proceed carefully. Addressing revenue leakages is vital but should not compromise transparency, accountability, or investor confidence. Nigeria cannot afford to prioritize short-term gains over building a modern, efficient petroleum sector.”
An anonymous energy expert and lawyer echoed these concerns, stating, “There is no sound legal or economic justification for this. The Ministry of Finance should focus on national fiscal management, not petroleum operations. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) cannot serve as both regulator and operator-this was a key issue the PIA sought to resolve.”
He added that while amending laws is not inherently problematic, the critical question is whether the amendment addresses a genuine flaw or gap. “Transferring petroleum matters to MOFI or converting NUPRC into an operator does not fix any shortcomings in the PIA; it creates new problems.”
He also questioned the rationale for MOFI’s involvement in petroleum affairs, noting, “There is no special connection between MOFI and petroleum matters any more than with solid minerals. Will MOFI also take over solid minerals development?”
