KEY POINTS
- Nigeria oil contracts may shift from NNPC to NUPRC.
- Lawmakers say the change will block opaque deductions.
- Critics warn of conflicts and investor pushback.
Nigeria is weighing a plan to strip the state oil company of its long-standing authority over oil contracts and hand that power to the upstream regulator, a step that could mark the most sweeping industry shake-up since the 2021 Petroleum Industry Act.
Under the proposal, the Nigerian National Petroleum Company Ltd. (NNPC) would lose its decisive role in managing production-sharing and joint-venture agreements. That responsibility would be transferred to the Nigeria Upstream Petroleum Regulatory Commission (NUPRC). Lawmakers backing the plan argue it is designed to plug “statutory leakages and opaque deductions” that have cost the government billions over decades.
Nigeria oil contracts face conflict concerns
The Petroleum Industry Act was meant to clarify roles across the sector. Yet critics say NNPC’s hybrid identity as both a commercial operator and contract gatekeeper left ample room for manipulation. Moving control to NUPRC, officials contend, will clean up revenue flows and strengthen transparency.
The risks are evident. If the regulator is granted full contract authority while retaining oversight responsibilities, it could end up as both judge and jury over agreements it supervises. Industry analysts warn that international oil partners may challenge contract amendments in court if they believe hard-won terms are threatened. Such disputes could slow new investment at a time when Nigeria’s output is already struggling.
Focus keyphrase underpins sector uncertainty
Nigeria has been pumping well below its OPEC quota due to theft, pipeline sabotage, and years of underinvestment. Domestic refining is only now reviving, with the Warri refinery restarting and the Dangote refinery ramping up after decades of dependence on imports, according to OilPrice.
For Abuja, the proposal reflects desperation to shore up public finances. Oil remains the country’s main revenue source, but transparency and efficiency have long been undermined by overlapping mandates.
