An analysis of the Petroleum Industry Act of 2021: opportunities, difficulties, and future directions

Abstract

The investigation examines the deficiencies in the provisions of the Petroleum Industry Act (PIA) that may impede the effective application of the Act in achieving its objectives. The repealed Petroleum Act of 1969 has become obsolete and largely incapable of meeting emerging global best practices in the industry due to inadequate sanctions and a failure to address the aspirations of the people in oil-bearing states, among other factors. Therefore, the necessity arose for the PIA of 2021 to revamp the industry to meet global standards, despite the existence of some controversial provisions that pose challenges to its proper implementation. The study scrutinises the PIA to identify its prospects, challenges, and the way forward. The methodology employed in the study is doctrinal research, utilising reports from existing literature and tertiary data sources such as newspapers, the Internet, and websites. The data collected from these sources was theoretically analysed and juxtaposed with current literature on the subject. The findings indicate that the PIA does not make adequate provisions for the energy transition in line with Nigeria's Nationally Determined Contributions (NDC) under the Paris Agreement. Additionally, the PIA establishes weak institutions, leading to weak implementation and enforcement of the law, thereby widening the gap between the law and reality. In conclusion, the study asserts that while the Act has provided much-needed stability in the petroleum industry in Nigeria, there is a pressing need for an overhaul to further safeguard the interests of host communities and facilitate the co-ownership of petroleum resources by state governments.