The Nigerian Midstream and Downstream Petroleum Regulatory Authority has stated that oil and gas companies operating within free trade zones, export processing zones, and other designated special areas in Nigeria are still fully bound by the provisions of the Petroleum Industry Act 2021, as well as all regulations made under it.

The regulator made the clarification in an industry circular issued recently, stressing that such zones do not exempt operators from compliance with petroleum sector laws.

Free zones are specially designated areas established by the government to attract investment and boost industrial activity through incentives such as tax reliefs, customs waivers, and streamlined regulatory procedures.

These include export processing zones, industrial estates, and special economic zones where businesses often enjoy limited fiscal and administrative concessions.

However, the NMDPRA emphasised that these incentives do not remove or reduce the obligation of oil and gas operators to comply with petroleum sector regulations under the PIA 2021.

“The operation of any midstream or downstream petroleum facility within a free zone, export processing zone or similar area does not exempt such facility and its operations from compliance with the provisions of the PIA and regulations made thereunder,” it stated.

In the circular addressed to managing directors and chief executives of oil and gas midstream and downstream companies, as well as petrochemical and fertiliser firms and import and export terminal operators, the authority reaffirmed that it retains full statutory oversight over all midstream and downstream petroleum operations across Nigeria.

The agency noted that its regulatory mandate covers all midstream and downstream petroleum activities and applies across the entire country, including the continental shelf, territorial waters, the exclusive economic zone, free zones, export processing zones, industrial zones, and any other designated locations.

The agency said it is the statutory regulator responsible for the technical, commercial, operational and licensing oversight of all midstream and downstream petroleum activities in Nigeria.

It further informed operators that all midstream and downstream petroleum operations, including refining, processing, storage, bulk transportation, pipelines, gas transportation networks, terminals, jetties, wholesale supply, importation, exportation, distribution, and the sale of natural gas and petroleum liquids — fall under its regulatory supervision.

It further warned that all midstream and downstream petroleum operations must secure the appropriate approvals before commencing any business activities.

According to the circular, “No person shall establish, construct, operate or undertake any midstream or downstream petroleum activity except with an appropriate licence, permit or authorisation granted by the Authority in accordance with the PIA.”

The authority also moved to reinforce its supervisory powers over government institutions whose actions could impact petroleum operations in the sector.