Nigeria Eyes Major Oil Sector Shakeup as Regulator Set to Seize Contract Control from NNPC
In a dramatic move that could reshape Nigeria’s oil industry, the government is considering stripping the Nigerian National Petroleum Company (NNPC) of its contract management authority and handing it over to the upstream regulator. The proposed transfer would move existing oil contracts from NNPC to the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) in what lawmakers describe as the most significant sector overhaul since the 2021 Petroleum Industry Act.
The bold restructuring aims to eliminate what officials call “statutory leakages and opaque deductions” that have hemorrhaged government revenues for decades. Under the current system, NNPC operates as both a commercial player and contract gatekeeper, creating what critics argue is too much room for manipulation and mistrust.
However, the proposal carries substantial risks. International oil partners are expressing concerns about potential legal battles over existing contracts, while investors worry about NUPRC becoming both judge and jury over agreements it would regulate. Nigeria’s oil sector is already struggling with output well below OPEC quotas due to theft, pipeline sabotage, and chronic underinvestment.
The move signals the cash-strapped government’s desperation to maximize oil revenues, which remain Nigeria’s primary income source. Whether the restructuring delivers genuine reform or merely shifts opacity between institutions will depend on the independence and transparency the government grants its regulator.
Source: Oilprice.com
