Nigeria's Petroleum Industry Act Transforms NNPC Structure

The Petroleum Industry Act (PIA), which President Muhammadu Buhari assented to in August 2021, aims to deregulate Nigeria's hydrocarbons sector and transition its petroleum industry to a globally competitive level. The Act, comprising 319 sections and eight schedules, unbundles the Nigeria National Petroleum Company (NNPC) into distinct entities, separating regulatory functions from operations.

It establishes two new regulatory bodies: the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The NNPC is to be transformed into a Limited Liability Company, with the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated as its authorized shareholders.

The PIA mandates the new NNPC to invest in renewables and act as a supplier of last resort for security reasons, while also ensuring national energy security. Relaunched in July 2022 as NNPC Limited, the company operates under a business model that is neither fully private nor a traditional state-owned enterprise.