Farouk Ahmed, Chief Executive of NMDPRA
…The Authority takes significant steps to streamline its regulatory processes with a view to removing barriers to developing refining capacity, envisioning a transparent, competitive downstream market that attracts investment.
-Felix Douglas
The Authority Chief Executive of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, presenting his industry address at the Crude Oil Refinery Owners Association of Nigeria (CORAN) summit in Lagos, told participants and stakeholders that refineries play a critical role and, in this aspect, the imperative of a well-articulated regulatory framework for a competitive refining market cannot be overemphasised.
Farouk pointed out that the summit will contribute necessary impetus for strengthening Nigeria’s refining capacity with the view to promoting government’s intentions for local penetrations that will position refinery products for competitiveness in the global arena.
“In framing the regulations for a competitive refining market, considerations were giving to, streamlining regulatory processes to remove barriers to developing refining capacity in the downstream petroleum sector involves. It simplifies, clarifies, and aligning regulations with industry needs.”
According to the NMDPRA helmsman, key approaches in streamlining competition includes simplifying and licensing to establish a one-stop-shop for permitting, where investors can complete all regulatory requirements through a single platform. This reduces delays and confusion in acquiring permits for new refining projects.
Digitizing the regulatory process which is by implementing digital platforms for licensing, reporting, and compliance monitoring which speeds up processing times, reduces paperwork, and improves transparency in regulatory oversight.
NMDPRA has automated more than 85% of its work processes to incentivizing private investment.
The Authority ensures that regulatory frameworks are clear, predictable, and consistent across regions. It is aligning regulations with international standards to avoid duplication of processes and reduce compliance costs for refineries. The Authority has developed more than 20 regulations 16 of which have been gazetted. These Regulations are properly aligned with international standards.
NMDPRA has encouraged investment, attracted new refining projects, and grown refining capacity in the midstream sector. It envisions a critical role in facilitating a transparent and competitive downstream sector that attracts investment by focusing on several key areas.
The Authority has positioned itself as a catalyst for creating a competitive, transparent, and investment-friendly downstream sector in Nigeria, aligning with its broader goals of improving energy security, increasing refining capacity, and fostering sustainable economic growth.
In addition, NMDPRA approach is to strike a balance between regulatory enforcement and encouraging private refining space. This requires a careful mix of stringent oversight and enabling policies that promote investment.
The creation of a stable and predictable regulatory environment is to ensure regulations are clear, predictable, and stable, providing private investors with confidence in long-term planning. In introducing regulatory changes, a transparent approach involving consultations with industry stakeholders is adopted to avoid sudden policy shifts that could disrupt operations or discourage investment.
Farouk submitted that NMDPRA will continue to encourage Public-Private Partnerships (PPP).
“We see partnering with private sector players as a plus to building refining capacity, leveraging on government resolve and resources to de-risk projects while ensuring compliance with operational and environmental standards. In progressing this strategy, NMDPRA will streamline licensing and approvals with emphasis on simplified and digitalizing licensing, permits, and other approval processes to reduce bureaucratic delays. A clear, timely approval process is crucial for private investors, allowing them to launch projects without excessive regulatory hurdles.”
There is need to provide a conducive legal framework for private investment to address dispute resolution mechanisms. This is with a view to create clear, accessible legal pathways to resolve disputes between the government and private investors, ensuring fair outcomes and reducing the risk of litigation that could discourage investment.
Farouk advised on environmental and social responsibility that private refiners should engage in Corporate Social Responsibility (CSR) initiatives, through the Host Community Development Trust (HCDT) especially in areas where refineries are located, ensuring social benefits like job creation and local development.
The Authority has taken significant steps to streamline its regulatory processes with a view to removing barriers to developing refining capacity. It envisions in facilitating a transparent, competitive downstream market that attracts investment which is amplified in Section 32 of the Petroleum Industry Act 2021 (PIA) that outlines the objectives of NMDPRA.
The NMDPRA recognizes the importance of private sector investment which is crucial to the development and expansion of the industry.
“Accordingly, we do not focus on the enforcement of penalties for violations of the PIA or Regulations. Rather, on a collaborative and non-confrontational approach is considered preferable.
We therefore encourage that industry participants comply with the PIA to ensure NMDPRA maintains a monitoring rather than an enforcement stance.”
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