The presentation by Professor Omowumi Wumi Iledare before the House of Representatives Committee on Petroleum Downstream at the National Assembly in Abuja was not a mere policy commentary — it was a sober call to responsibility. With characteristic clarity and scholarly calm, Professor Iledare described the Petroleum Industry Act (PIA) 2021 as “a bold reform with transformative potential, but not a self-executing one.”
He began by acknowledging that the PIA stands among the most important public-policy achievements in Nigeria’s post-independence history — a product of nearly two decades of reform advocacy, legislative dialogue, and stakeholder engagement. Yet, he noted, the Act’s significance lies not only in its passage but in its promise: to move Nigeria’s petroleum industry from policy confusion to institutional clarity, and from rent-seeking behavior to value creation.
At the heart of his message was a powerful reminder that “good policy without good governance is like new wine in old wineskins — the outcome is waste.” In his view, the PIA’s architecture — built on the separation of policy, regulatory, and commercial roles — represents a governance philosophy that must be protected from political manipulation and administrative fatigue.
Governance Beyond Legislation
In his reflections before lawmakers, Professor Iledare observed that the Petroleum Industry Act was crafted not merely as a petroleum law, but as a governance framework for the 21st-century energy economy. By distinguishing between policy formulation, regulatory enforcement, and commercial operations, Nigeria finally embraced an institutional model consistent with global standards.
He commended the visible progress achieved through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), particularly their strides in transparency, digital monitoring, and operational accountability. However, he expressed concern that the continued absence of properly constituted Boards for these agencies threatens their autonomy and weakens investor confidence.
“Institutions cannot thrive on personality; they require structure,” he said. “Without Boards, regulatory independence becomes vulnerable, and policy coherence is easily compromised.”
The Fiscal and Investment Climate
Turning to the investment environment, Professor Iledare underscored that the PIA’s fiscal architecture remains one of its most transformative accomplishments. The simplification of hydrocarbon taxes, clarification of cost recovery, and rationalization of royalty structures have restored a measure of investor confidence that had been lost under years of fiscal ambiguity.
Evidence of renewed optimism, he noted, can be seen in the reactivation of marginal fields, fresh exploration interest in frontier basins, and new rounds of deepwater contract renegotiations. Yet, he cautioned, fiscal stability must not be sacrificed on the altar of political expediency. Constant reinterpretation of the Act, or calls for amendment before full implementation, reintroduces the very uncertainty the PIA was designed to remove.
“Investors,” he said, “do not demand perfection; they demand predictability. Reform must evolve through evidence, not agitation.”
He also reiterated that fiscal design is not only about revenue generation but about intergenerational equity — ensuring that the resources of today create enduring value for the generations of tomorrow.
Performance Across the Value Chain
In evaluating the performance of the PIA, Professor Iledare took a holistic view of the petroleum value chain — upstream, midstream, and downstream.
In the upstream sector, crude oil production is gradually recovering from a low of 1.2 million barrels per day to nearly 1.6 million barrels daily. Improved security collaboration and fiscal clarity are restoring confidence, yet the cost of production remains unacceptably high. He emphasized that the recently introduced Cost Efficiency Order 2025, if properly aligned with the spirit of the PIA, could be a game changer in reducing waste and improving operational performance.
In the midstream sector, the emergence of the Midstream and Downstream Gas Infrastructure Fund (MDGIF) has created a strategic lever for gas commercialization. Nigeria’s pivot toward gas as a transition fuel, he noted, is evident in new infrastructure projects, virtual pipeline systems, and industrial gas supply frameworks. “Gas,” he remarked, “is not merely a transition fuel; it is the bridge between energy poverty and energy prosperity.”
The downstream segment, he continued, is witnessing long-overdue liberalization. The entrance of the Dangote Refinery and other modular operators signals a new competitive frontier. However, he cautioned that liberalization must not degenerate into monopoly. True deregulation, he insisted, must reflect “competition with compassion” — balancing market freedom with fairness to consumers.
Regional Lessons and the Gulf of Guinea
Professor Iledare extended his reflection beyond Nigeria’s borders, urging sister nations in the Gulf of Guinea — including Ghana, Angola, Equatorial Guinea, Gabon, and Cameroon — to draw practical lessons from Nigeria’s PIA experience.
He identified three transferable lessons:
Institutional separation enhances accountability. Good governance demands clarity of roles and responsibility.
Fiscal competitiveness must align with national interest. Incentives should attract capital without shortchanging citizens.
Reform must produce visible social value. Laws that do not improve citizens’ welfare, he cautioned, risk becoming hollow political victories.
“If Nigeria gets the implementation right,” he noted, “it will not only transform its petroleum economy but inspire a governance renaissance across the Gulf of Guinea.”
Bridging the Implementation Gaps
In concluding his narrative to the Committee, Professor Iledare identified four critical imperatives to sustain reform momentum:
Constitute the Boards of NUPRC and NMDPRA without further delay.
Reinforce the policy design capacity of the Ministry of Petroleum Resources.
Institutionalize transparency through open access to credible petroleum data.
Invest deliberately in human capital and leadership ethics.
He reminded policymakers that the success of the PIA cannot be separated from the competence, integrity, and discipline of those charged with executing it. “No statute, however well-written, can outperform the character of its implementers,” he said pointedly.
From Policy to Posterity
Professor Iledare’s presentation concluded not with a sense of triumph, but with a call to endurance. The PIA, he emphasized, is not an end in itself, but a beginning — a framework for Nigeria to rebuild confidence, redefine governance, and reposition its petroleum industry as a catalyst for sustainable development.
He urged both lawmakers and policymakers to focus less on what the law promises and more on what it performs.
“The PIA’s journey from policy to promise must now yield the harvest of posterity, not applause,” he declared.
In his familiar reflective tone, he left his audience with a final admonition that resonated across the chamber:
“Uncertainty is not destiny. The true test of governance is not the passage of a law but the discipline to implement it faithfully.”
Professor Emeritus of Petroleum Economics
Principal Facilitator, FUPRE Energy Business School
Executive Director, Emmanuel Egbogah Foundation
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