Introduction

In early 2026, the Nigerian Midstream and Downstream Petroleum Regulatory Authority published the Regulations. Coming into force as a further step in the implementation of the Petroleum Industry Act 2021 (PIA), the Regulations represent the most significant consolidation of the midstream and downstream regulatory framework since the NMDPRA commenced operations in 2021.

For operators across the midstream and downstream value chain, including pipeline operators, gas processors, petroleum product distributors, storage facility operators, and refiners, the Regulations introduce new obligations alongside firm deadlines. The most commercially urgent is the structural separation requirement, which falls due on 7 July 2026. Understanding what the Regulations require, and what options remain available to operators who have not yet achieved separation, is a matter of immediate practical priority.

The Consolidation: What Has Been Revoked

The Regulations revoke eight prior regulatory instruments in their entirety, including the Midstream and Downstream Petroleum Operations Regulations No. 8, 2023; the Petroleum Measurement Regulations No. 4, 2023; the Petroleum (Transportation and Shipment) Regulations No. 3, 2023; the Assignment or Transfer of Licence and Permit Regulations No. 6, 2023; the Midstream and Downstream Penalties and Enforcement Mechanisms Regulations No. 14, 2023; the Midstream Gas Flare Regulations No. 20, 2023; the Petroleum Refining Regulations No. 45, 1974; and the Petroleum Regulations No. 71, 1967. Any other regulations previously administered by the defunct Department of Petroleum Resources in respect of midstream and downstream operations are also revoked.

This is a clean-break consolidation. The previous frameworks no longer govern current operations. Existing licences, permits, and approvals remain valid; the Regulations do not unwind actions taken under the former regime, but all ongoing and future operations are now assessed against the new framework.

1. Structural Separation: The 7 July 2026 Deadline

The PIA’s structural unbundling mandate is not new. Section 10 of the PIA prohibits a company from combining upstream, midstream, and downstream petroleum operations without the prior approval of the relevant regulatory authority. What the 2025 Regulations do is give that principle operational teeth, with a binding deadline and explicit consequences.

Under Part IX of the Regulations, existing operators engaged in combined activities, whether as a legacy of operations predating the PIA or through an integrated corporate structure, must achieve full structural separation by 7 July 2026. This is twelve months from the commencement of the Regulations. Compliance requires the use of a separate legal entity for each distinct stream of petroleum operations: one company for upstream activities, a separate company for midstream, and another for downstream. Commencing or continuing combined operations beyond the deadline without NMDPRA approval constitutes a breach of the Regulations and exposes operators to the enforcement mechanisms under Part XVI.

• What separation is required in practice?

Structural separation is not a paper reorganisation. It requires operators to identify all activities currently conducted within a single corporate entity that span more than one sector of petroleum operations; establish separate legal entities for each regulated stream with distinct governance structures, operational systems, and financial accounts; transfer the relevant licences, permits, or approvals to the appropriate entity, itself a process requiring NMDPRA prior written consent under Part VIII; ensure that contracts, service agreements, and inter-company arrangements properly reflect the separated structure; and notify the NMDPRA of structural changes, including changes in the holders of existing licences and permits.

For larger operators with complex integrated operations this process involves corporate restructuring, regulatory filings, Federal Competition and Consumer Protection Commission analysis where the restructuring constitutes a notifiable transaction, and renegotiation of project-level agreements. Operators who have not yet commenced this process are materially behind.

• The extension mechanism

The Regulations provide one avenue of relief. The NMDPRA may grant a single extension of up to six months where an operator is unable to achieve separation by 7 July 2026. This is not automatic. An application must be made to the Authority, setting out the reasons for the delay and a credible compliance timeline. No provision is made for a second extension. Operators who are not yet compliant and who have not applied for an extension face the most constrained position: neither separated nor within the formal relief window.

2. The Compliance Officer: A Changed Obligation

The 2023 Regulations placed responsibility for appointing a compliance officer at the level of the manager. This was widely interpreted as an operational or facility-level appointment, and in practice it was sometimes treated as an administrative function.

The 2025 Regulations fundamentally change this. Under Regulation 4, the obligation to appoint a compliance officer now rests with the licensee or permit holder, the company itself, not a named individual within it. The compliance officer must be appointed in addition to, not instead of, a manager. The two roles are distinct and must be held by different persons.

The practical implications are significant. The compliance officer now sits at company level with institutional authority and accountability. This is consistent with the broader governance framework in Part X of the Regulations, which requires a board of directors that includes at least one director with petroleum sector experience; a Chief Executive Officer appointment subject to specified NMDPRA requirements and notification; and a Code of Conduct to be reviewed every five years, with at least one stakeholder forum held annually.

Operators that interpreted the compliance officer obligation under the 2023 Regulations as a field or facility-level appointment must revisit that position. The 2025 Regulations require a company-level compliance officer with clear institutional standing, operating within a governance structure that the NMDPRA can meaningfully scrutinise.

3. Notification Obligations: The Five-Working-Day Rule

Regulation 4 of the 2025 Regulations introduces a tight and unambiguous notification timeline. Notification of the appointment of a compliance officer, or of any subsequent change to that appointment, must be made to the NMDPRA not later than five working days from the date of the appointment or change.

This applies to the initial appointment and to every subsequent change. If a compliance officer resigns, is removed, or has their responsibilities altered, the notification obligation re-triggers from that event. Five working days is a short window for a regulatory notification, particularly where internal approvals and board resolutions are required before the notification can be made. Operators should have an established internal protocol for identifying and actioning this obligation promptly.

The notification framework under the Regulations extends further. Disclosure of affiliations with entities holding existing NMDPRA licences, permits, or approvals is required at the point of any new licence application, under Regulation 3(5). NMDPRA approval is now required for name changes, licence surrender, and cessation of operations, all of which must be applied for in advance. Existing operators must publish supply terms, tariffs, and prices within 180 days of the Regulations’ commencement, with new licensees required to do so at start-up.

The assignment and transfer regime has also been revised. Under Part VIII, it is now the transferor’s responsibility, not the transferee’s as under the 2023 Regulations, to apply for consent before any assignment, transfer, or disposal of a licence or permit. The NMDPRA’s response window for a notice of intention to assign has been extended from 21 working days to 30 calendar days. Operators should update their transaction management processes accordingly, as the reversal of the applicant obligation is a meaningful change that could otherwise be missed in a live transaction.

4. The Enforcement Landscape

Part XVI of the 2025 Regulations significantly strengthens the NMDPRA’s enforcement capability. Enforcement follows a structured process: non-conformity notices, a period to respond and remedy, and escalating consequences for continued non-compliance, but the available sanctions are materially more severe than under the previous regime.

For serious or persistent breaches, including unlicensed operations, environmental harm, financial misconduct, or failure to achieve structural separation, the NMDPRA may order a shutdown of operations; issue cease-and-desist orders; impose financial penalties of up to five per cent of annual turnover; revoke licences and permits; seal premises; or seize assets. Where no specific penalty is prescribed for a particular breach, administrative fines of up to USD 1 million may be imposed.

Operators should not assume that the structured enforcement process affords extended time to remedy significant compliance gaps. Non-conformity notices carry response deadlines, and the NMDPRA’s licensing and enforcement functions are now consolidated under a single coherent framework with clear escalation pathways.

5. Other Provisions Operators Should Note

Several further provisions warrant specific attention.

• Data repository obligations: Under Part XII, midstream and downstream operators must submit operational, technical, financial, and performance data to the Midstream and Downstream Petroleum Data Repository. The governance implications, including how submitted data is managed, what access rights the NMDPRA holds, and how commercially sensitive information is protected, require consideration, particularly for operators with international investors or parent companies with their own data governance obligations.
• Carbon capture and storage: The Regulations expressly bring carbon capture, storage, and utilisation activities within the NMDPRA licensing regime. Operators engaged in or planning CCUS activities must obtain the appropriate licence. This is a significant development for Nigeria’s energy transition framework, and one that the Regulations address more directly than any preceding instrument.
• Wholesale levy remittance: Regulation 7 clarifies that the consolidated 1% wholesale levy must be collected from wholesale customers by suppliers and remitted to the NMDPRA by the 21st day following the month of the relevant sale. The obligation sits with suppliers, not customers. Operators whose remittance procedures were structured under the 2023 Regulations, which required the NMDPRA to issue a debit note before payment was triggered, must update those processes accordingly.
• Expanded scope of gas and liquids regulation: Virtual transportation of gas and petroleum liquids now requires registration of the mode of transportation. Petrochemical and fertiliser plants linked to gas processing are expressly within the regulated scope. Biofuels and clean fuels are now regulated as petroleum liquids. Carbon capture, storage, and utilisation is expressly included. Operators whose activities fall in these areas and who were previously operating in a degree of regulatory ambiguity should treat the Regulations as establishing the applicable framework and regularise their position accordingly.
• Petroleum liquids trading: Petroleum liquids trading now requires an NMDPRA licence meeting the Securities and Exchange Commission and NMDPRA standards for governance, infrastructure, risk management, and transparency. Trading exchanges must maintain exit schemes to ensure orderly contract closure and protect market integrity.

Conclusion: Where Operators Stand

The 7 July 2026 structural separation deadline has arrived. The obligations are not aspirational, they are enforceable, and the enforcement framework is considerably sharper than the one it replaces.

Operators who have achieved full separation and appointed a company-level compliance officer with the required notification filed are in the strongest regulatory position. Operators who have partially separated, who have not applied for an extension, or who have not revisited the compliance officer appointment in light of the shift from manager-level to licensee-level responsibility face an immediate assessment of their position and the options available to them.

The Regulations represent a mature, consolidated regulatory framework that reflects the NMDPRA’s growing institutional capacity as a technical and commercial regulator. The PIA’s ambition for a professionally regulated, unbundled petroleum sector is now more concretely expressed in binding instruments with defined deadlines and meaningful consequences. Operators that treat compliance as a governance exercise, and not merely a documentary one, will be better placed to operate and invest under this framework over the years ahead.

This article was prepared by the Energy Practice of Oguntoye & Oguntoye LP. It is intended for general information purposes only and does not constitute legal advice. Readers should seek specialist legal advice in respect of their specific circumstances.