PENGASSAN Warns of Regulatory Uncertainty in Nigeria's Oil Industry

• PENGASSAN warns of regulatory uncertainty in Nigeria's oil industry
• Overlapping mandates and lengthy approval processes threaten fresh investment and production growth
• Investors need clear rules, predictability, and protection for workers to operate efficiently
• Nigeria must streamline approval processes, deploy technology, and maintain effective oversight
• Stronger enforcement of local content, health, safety, and environmental regulations is needed

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has sounded the alarm on regulatory uncertainty, overlapping mandates, and lengthy approval processes that could undermine fresh investment and slow production growth in Nigeria's oil and gas industry. At the fifth PENGASSAN Energy and Labour Summit 2026 in Abuja, President Festus Osifo highlighted these concerns, emphasizing that regulatory certainty is critical for investors making long-term commitments in the capital-intensive petroleum sector.

Osifo noted that while the Petroleum Industry Act (PIA) 2021 represented a major step towards reforming the sector, subsequent changes to the regulatory framework have created uncertainty. He pointed out that some fiscal provisions were moved from the PIA to the Nigeria Tax Act 2025 and executive orders were introduced, leading to overlapping responsibilities among regulatory agencies.

The PENGASSAN president urged the government to streamline approval processes and deploy technology to reduce regulatory bottlenecks while maintaining effective oversight, safety, and environmental standards. He warned that delays in approvals could frustrate development plans, final investment decisions, and projects capable of increasing oil and gas production.

Osifo also raised concerns about overlapping responsibilities among regulatory agencies, warning that operators should not be subjected to repetitive approvals, multiple inspections, and conflicting directives. He emphasized the need for clear rules, predictability, protection for workers, confidence in host communities, and sustainable revenues for governments.

The PENGASSAN president argued that investors need clarity and efficiency in regulatory frameworks, which should understand commercial realities, embrace technology, and eliminate unnecessary duplication. He noted that capital is mobile, and investors will naturally gravitate towards jurisdictions with clear and efficient processes.

Osifo further demanded stronger protection for workers affected by acquisitions, divestments, and restructuring in the industry, emphasizing that changes in ownership of oil and gas assets should not automatically translate into job losses or erosion of workers' rights.

To address these challenges, Osifo called for stronger enforcement of local content, health, safety, and environmental regulations. He also emphasized the need for increased investment in domestic refining, gas processing, and infrastructure for liquefied petroleum gas, compressed natural gas, and liquefied natural gas.

The PENGASSAN president urged Nigeria to move beyond simply recovering lost production and focus on unlocking new reserves, attracting fresh capital, and sustainably increasing oil and gas output. He emphasized the importance of building the capacity of Nigerian workers through measurable knowledge transfer and succession plans linked to expatriate appointments.

Lawyers advising clients on investments in Nigeria's oil and gas sector should be aware of the regulatory uncertainty highlighted by PENGASSAN, which could lead to delays in approvals and impact investment decisions. They should also consider the potential implications for their clients' operations and advise them on strategies to mitigate these risks.

Source: Original reporting via Punch Nigeria