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Background
On 12 May 2026, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued an industry circular to operators in the midstream and downstream petroleum sector reiterating its statutory oversight role for technical, commercial, operational and licensing regulations in the sector. The circular clarifies that NMDPRA’s regulatory mandate extends to free zones, export processing zones and industrial zones.
There are two material legal frameworks relevant to this circular. The first is the Oil and Gas Export Free Zone Act 1996 established the Oil and Gas Free Zones Authority (OGFZA) to regulate oil and gas free zones, including Onne, Warri and Brass. OGFZA licences enterprises within the zones and administers fiscal, customs and immigration regulations within the free zones. The OGFZA Regulations 2019 contains the procedures and requirements for licensing, customs, health, safety and environment (HSE) and construction within the zones. The second is the PIA, which established the NMDPRA with regulatory authority over midstream and downstream operations. Section 48(1) of the PIA requires government ministries, departments and agencies (MDAs) to consult NMDPRA before taking any actions affecting midstream or downstream petroleum operations. The PIA prevails in the event of any inconsistency or conflict with another enactment.
The circular addresses the intersection of these frameworks as operators in the midstream and downstream are subject to the dual administrative and regulatory frameworks of the NMDPRA and the OGFZA where they operate in any OGFZA free zone.
Should you have any questions on this legal alert, please do not hesitate to contact Oghogho Makinde.
15 June 26
Other Insights:
Is the circular aligned with the law?
The PIA vests NMDPRA with primary regulatory authority over all midstream and downstream petroleum operations in Nigeria, over and above any existing enactments. The circular’s position that all midstream and downstream operators in a free zone must comply with NMDPRA regulatory oversight is therefore consistent with the PIA.
In practice, there is already regulatory interface and coordination between the NMDPRA and OGFZA. The general market practice is that midstream and downstream operators in the oil and gas free zones obtain both the NMDPRA permits alongside their OGFZA licences. The circular appears to target operators who may be unaware that free zone status does not exclude them from the NMDPRA regulatory oversight.
What should free zone operators and investors do?
- Free zone status does not substitute for NMDPRA midstream and downstream sector licensing regime. Operators conducting refining, processing, storage, bulk transportation, pipelines, terminals, wholesale supply, importation, exportation, distribution or sale of petroleum products and natural gas come under NMDPRA regulatory purview and must procure the necessary NMDPRA permits, licenses and registrations, regardless of their location in a free zone or in the customs territory.
- Investors in free zones or considering free zone status for midstream and downstream operations should ensure that their pre-investment due diligence include all applicable laws and regulations to avoid regulatory risks.