Stakeholders Warn Against Proposed PIA Amendments That Could Reverse Oil Sector Reform Progress
Story: written by Joseph October 28,2025
Nigeria’s landmark Petroleum Industry Act (PIA), passed in 2021 to overhaul governance in the oil and gas sector, faces fresh uncertainty as the Federal Government considers major revisions. The key proposal seeks to transfer concessionaire authority from the Nigerian National Petroleum Company (NNPC) Limited to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
While the government argues that the move will strengthen transparency and reduce revenue leakages, industry analysts caution that it could introduce significant governance conflicts, destabilise existing investments, and reverse gains achieved through the PIA.
The PIA was celebrated for segregating commercial and regulatory mandates to eliminate conflict of interest. Under the legislation, NUPRC regulates the upstream sector, while NNPC functions as a commercially driven national oil company. The proposed changes threaten to merge both powers under NUPRC.
Legal experts assert that allowing the regulator to issue licences, police the sector, and simultaneously serve as a commercial counterparty in oil contracts would undermine accountability.
Energy lawyer Ayodele Oni argues that, “A regulator that signs contracts and enforces them introduces clear conflict of interest. It exposes decisions to legal disputes and undermines investor confidence.”
Existing Joint Venture (JV) and Production Sharing Contracts (PSCs), which generate over 70 percent of Nigeria’s petroleum output and were executed with NNPC as government partner, could also be jeopardised. Transitioning concessionaire rights without renegotiating contract terms risks lengthy disputes and financial delays.
Experts add that regulatory overreach may slow down investment approvals, especially for capital-intensive deepwater and gas developments that require rapid commercial decision-making. Nigeria already struggles to meet its OPEC quota, averaging 1.434 million barrels per day in August 2025, below its 1.5 million bpd target. Any additional obstacles could worsen revenue shortfalls.
The proposed reform comes at a delicate time for Nigeria’s upstream sector, with global majors like Shell, TotalEnergies, and ExxonMobil exiting or scaling back due to security concerns, unstable contracts, and regulatory unpredictability. Creating further legal ambiguity may discourage much needed capital inflows.
Analysts propose alternative solutions that preserve regulatory independence, including improved corporate governance at NNPC, greater private-sector participation in JVs, and clearer legal frameworks for existing agreements before any amendment proceeds.
Observers warn that a shift giving NUPRC both regulatory and commercial powers could return the industry to old inefficiencies. Concentrating too much authority in a single institution heightens corruption risks and may erode confidence the PIA sought to build.
Nigeria must ensure that needed reforms do not compromise the structural safeguards that underpin the future of its petroleum sector. Maintaining stability, investor trust, and strong institutional boundaries remains crucial for energy growth and national revenue sustainability.
