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 underperforming, 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