Operator Obligations Under the NMDPRA Midstream and Downstream Petroleum Operations Regulations, 2025
The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued the Midstream and Downstream Petroleum Operations Regulations, 2025 (the "2025 Regulations"), consolidating and updating the regulatory framework governing activities in Nigeria's midstream and downstream petroleum sector. Applicable to all persons and entities operating within this space, the 2025 Regulations impose set of obligations spanning licensing and disclosure, corporate governance, financial reporting, and customer relations.
This piece provides an overview of the key obligations that operators are required to comply with under the 2025 Regulations.
Scope of Regulated Activities and Licensing
Midstream and Downstream Gas Operations - The 2025 Regulations significantly broaden the scope of regulated gas facilities and activities. On the infrastructure side, the Regulations expressly bring within the licensing regime petrochemical and fertiliser plants linked to gas processing, designated gas import and export points, and the introduction of hydrocarbons into midstream gas facilities. Notably, the Regulations now expressly regulate carbon capture, storage and utilisation (CCUS) activities, thereby extending the licensing framework to energy transition–related gas operations which is a significant development reflecting the sector’s evolving role in Nigeria’s clean energy trajectory.
With respect to market and supply chain activities, open access and third-party access operations are now expressly regulated. Virtual transportation of gas and gas derivatives is also strengthened: rather than merely recognising the activity, the Regulations now require registration of the specific mode of transportation. LPG and CNG activities are more clearly delineated, with a distinction drawn between bulk cylinder exchange and retail operations. The Regulations further refine provisions governing market access, storage, and technology-related activities.
Midstream and Downstream Petroleum Liquids Operations - The 2025 Regulations also materially expand the scope of regulated petroleum liquids facilities and activities beyond what was provided under the 2023 Regulations. New regulated facilities expressly include petrochemical and fertiliser plants, storage depots for petroleum products, and designated petroleum liquids import and export points. Licensing requirements are also introduced for the introduction of hydrocarbons into midstream petroleum facilities. In terms of market and supply chain oversight, the Regulations extend regulatory coverage to distribution, marketing, retail trading, wholesale petroleum liquids trading, and settlement operations. Open access and third-party access operations are similarly brought within the regulatory framework.
As with gas operations, virtual transportation of petroleum liquids is strengthened by a requirement for registration of the mode of transportation.The 2025 Regulations also extend their reach to emerging and transitional energy activities by expressly regulating the production, distribution, storage, and utilisation of biofuels and other clean fuels, reflecting a deliberate legislative effort to future-proof the regulatory framework in line with energy transition objectives.
Disclosure of Affiliate Interest - Where an affiliate of a company that holds any licence, permit, or approval issued by the Authority applies for a licence or approval under the 2025 Regulations, such affiliate is expressly required to disclose the nature of the affiliate relationship to the Authority at the time of application.
Corporate Governance and Organizational Requirements
Separation of Value Chain Business Activities – Consistent with the provisions of the Petroleum Industry Act (PIA), no person may conduct upstream, midstream, and downstream petroleum activities through a single corporate entity. Subject to the Authority’s approval, a single company may, however, hold licences or permits covering both midstream and downstream petroleum operations . The 2025 Regulations require all affected entities to register and operate separate companies for each applicable stream of petroleum operations no later than 12 months from the commencement of the Regulations (i.e., on or before 7 July 2026). The Authority retains discretion to grant a further six-month extension where warranted.
Board Composition Requirements - The Board of Directors of any company engaged in midstream or downstream petroleum operations must include at least one member who possesses demonstrated and proven knowledge of the specific petroleum operations conducted by that company.
Criteria for the Appointment of CEO - The minimum criteria for the appointment of a Chief Executive Officer are as follows:
(a) a minimum of two years of cognate experience in the relevant sector of the midstream or downstream petroleum industry; and
(b) such additional criteria as the company may determine to be relevant and appropriate.
The company is required to notify the Authority in writing of any Chief Executive Officer appointment no later than 21 working days following the date of such appointment.
Appointment of Compliance Officer - The 2025 Regulations transfer responsibility for the appointment of a compliance officer from the manager (as previously provided under the 2023 Regulations) to the licensee or permit holder. The licensee or permit holder is required to appoint a compliance officer independently of, and in addition to, the appointment of a manager. Notification of any such appointment, or of any subsequent change thereto, must be submitted to the Authority no later than five working days from the date of the relevant appointment or change.
Code of Conduct and Business Ethics – Every company undertaking midstream and downstream petroleum operations is required to establish and maintain a code of business conduct and ethics. The code must disclose all information and practices necessary to sustain public confidence in the company’s operations. The code shall be reviewed at least once every five years; however, the Authority may direct that a review be conducted prior to the expiration of that period where it deems such a review appropriate.
Termination of Senior and Management Staff - The termination of employment of any senior or management staff member within a company conducting petroleum operations under the 2025 Regulations requires the prior written authorisation of the Authority.
Financial Obligations and Reporting
Levy Payment to the Authority Fund – A levy of 0.5% of the wholesale price of petroleum products sold in Nigeria (whether imported or locally processed or refined) is payable to the Authority Fund. Departing from the mechanism under the 2023 Regulations (which required the Authority to issue debit notes following the issuance of a certificate of quantity or product reconciliation), the 2025 Regulations now place the obligation to collect and remit this levy squarely on suppliers. Suppliers are required to collect the levy from wholesale customers and remit same to the Authority no later than the 21st day following the month in which the relevant sale occurred, or within such other period as the Authority may direct.
Levy Payments to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) - A corresponding levy of 0.5% of the wholesale price of petroleum products and natural gas sold in Nigeria is payable to the Midstream and Downstream Gas Infrastructure Fund. The collection and remittance mechanism mirrors that prescribed for the Authority Fund levy: suppliers are obligated to collect the levy from wholesale customers and remit it to the Authority no later than the 21st day following the month of sale, or as otherwise directed by the Authority.
Monthly Reporting Obligations and Penalties for Default - Every supplier of petroleum products is required to submit a monthly report to the Authority no later than the 30th day of each month. Such report shall contain:
(a) the volumes, prices, and names of wholesale customers; and
(b) copies of all relevant purchase agreements, invoices, receipts, and supporting documentation evidencing the sale of petroleum products or natural gas.
Failure to remit the prescribed levies or to file the required monthly reports will render the defaulting supplier liable to an administrative penalty equivalent to 10% of the outstanding amount for each month or part thereof following the due date. In addition, the Authority reserves the right to suspend the supplier’s licence and the operations of any facility into which the relevant petroleum product or natural gas was processed, discharged, or stored, pending full settlement of all outstanding levies and penalties.
Periodic Performance Reporting - Each licensee or permit holder is required to prepare and submit to the Authority periodic reports detailing performance levels and the operational status of its activities. Such reports must be submitted at a minimum of once per annum, or at such other intervals as the Authority may from time to time prescribe.
Operational Compliance and Customer Relations
Publication of Terms of Supply or Distribution - Existing licensees are required to publish their terms of supply or distribution, including applicable tariffs and prices, excluding those governed by negotiated tariff arrangements under section 122(4) of the PIA, no later than 180 days from the commencement of the 2025 Regulations (i.e., by 3 January 2026; licensees already in default are required to comply immediately). New licensees are required to publish their terms of supply or distribution upon the commencement of petroleum operations.
Stakeholder Communication and Engagement - Licensees are required to conduct at least one stakeholder forum per annum, providing a structured mechanism for stakeholders and customers to raise concerns regarding the company’s operations. The following procedural requirements apply:
(a) the licensee must notify the Authority of the forum’s date, time, mode, venue, agenda, and expected participants no later than 30 days prior to the commencement of the forum; and
(b) a report on the outcome of the forum must be submitted to the Authority no later than 30 days following its conclusion.
Customer Service Codes - Each licensee is required to develop, implement, and strictly adhere to customer service codes governing key operational and customer-facing activities, including metering, fault rectification, connections, complaints handling, billing, payments, and customer information. These codes must be submitted to and approved by the Authority, are subject to periodic review by the Authority, and must be communicated to and made readily accessible by customers.
Establishment of Customer Service Desk - Every licensee is required to establish and maintain a dedicated customer service desk for the purpose of receiving and addressing complaints from customers in respect of the licensee’s operations.
The 2025 Regulations reflect a concerted effort by the NMDPRA to strengthen regulatory oversight of Nigeria's midstream and downstream petroleum sector through a more structured and consolidated compliance framework. For operators, the Regulations underscore the importance of proactive governance, timely financial reporting, and meaningful stakeholder engagement as baseline expectations, not merely administrative formalities.
Given the range of obligations covered and the penalties prescribed for default, operators would be well-advised to conduct a thorough review of their current practices against the requirements of the 2025 Regulations and take steps to address any gaps without delay.
*This article is for informational purposes only and does not constitute legal advice. For enquiries, please contact info@kietlaw.com
