LEGAL ANALYSIS OF EFFECTIVE REGULATORY GOVERNANCE OF NIGERIA’S PETROLEUM INDUSTRY: IMPEDIMENTS AND IMPERATIVE FOR REFORM

Abstract

Petroleum production is traditionally associated with enormous national wealth vis-à-vis
availability of refined petroleum products and sustainability of energy supplies to the citizenry
of the nation where petroleum resources is tapped. However, the case of Nigeria is at variance
with this trend. ‘Resource curse’ had become the language that best describes the Nigerian
experience. The purpose of this article was to conduct a legal analysis of the efficient
regulatory control of Nigeria's petroleum industry, identify and talk about the current barriers,
and argue that reform is necessary. This article adopted the doctrinal approach to carry out the
analysis of the relevant rules, legal instruments and regulatory governance institutions
controlling Nigeria’s petroleum industry. The article found out that the vertical integration of
the International Oil Corporations (IOCs) which hampers the quest for indigenous oil
companies to gain proper foothold in the nation’s petroleum industry and hinders the latter’s
industrial growth constitutes an impediment to effective regulatory governance of Nigeria’s
petroleum industry. The article concluded that the regulatory governance mechanism of
Nigeria’s petroleum industry is under-performing, thus making the clamour for reform
imperative. Hence the article recommended that the operations of the IOCs should be restricted
to the upstream while the activities at the midstream and downstream should be reserved for
the indigenous oil companies in order to reverse the undesirable trend of denying the latter
from gaining foothold and experiencing growth in the petroleum industry and rejig the
effectiveness of the regulatory governance of Nigeria’s petroleum industry.