Thursday, 30 June 2022




Indeed, I feel highly honoured by the invitation to review this reference book ‘Nigerian Laws, Cases and materials on Oil and Gas’ written by my friend and colleague Niyi Ayoola-Daniels, Esq.

Perhaps before I delve into my primary assignment, I will start by sharing with you what motivated the author to embark on the publication of this book. In my discussion with Niyi sometime in 2005, he told me of an indirect challenge thrown at him by two American Investment attorneys whom he met at Columbia University Law Library on a visit to New York. These New York Attorneys requested to know if there was a one-source publication where they could obtain up-to-date information on the complete laws and regulations governing Nigeria’s oil and gas industry (upstream, midstream and downstream).

They claimed to have contacted the Nigeria Consulate in New York and the Embassy in Washington but without any useful and positive outcome. It was upon his return to Nigeria and after our discussion during which he got to know that I was the author of the book “Petroleum Development Contracts between Nigeria and the Multinational Firms” that he decided to respond to this challenge of producing this unique book that is being  publicly presented to you here  today.

You will all agree with me that Nigeria’s oil and gas legal regime is a specialised area of law, regulating the exploration, production and transportation of crude oil and natural gas, the supply, distribution, storage and marketing of petroleum products, as well as liquefied natural gas. As diverse as the area of coverage, so diverse is the legal regime governing same in the form of statutes, cases, subsidiary legislations and regulations.

In other words, there has been no one one-stop compendium containing all these laws and cases until now. This is what makes this book unique. The book is unique in the sense that unlike those written by earlier scholars and experts in the field, it goes one step further. It is a one-stop digest of Nigeria ’s oil and gas laws, regulations, relevant cases, materials and commentary and is therefore a welcome addition to the existing works on the subject. Indeed, the book covers laws governing the entire legal regime regulating the upstream, midstream and downstream operators of Nigeria’s petroleum and natural gas industry.

In content and form, the book is broadly divided into two volumes. Volume one (1) is composed of five parts whereas volume 2 comprises 11 parts. The work is published in loose leaf form which covers the 16 parts and gives complete outline, comments and indexes to all the laws, statutory instruments and judicial decisions. Almost all oil and gas cases decided by Nigerian courts are adumbrated in this work and their relevance highlighted. One great advantage of this loose leaf format adopted by the author is that new changes or amendments in the laws or statutory instruments affecting Nigeria’s oil and gas industry can easily be incorporated into the pertinent sections of this work by the user. I understand the author will periodically publish updates of the new laws, amendments of statutes, cases and other materials and make them available to subscribers. These updates will then be periodically inserted into this work by the user and the old or outdated ones removed.

Legal framework for Fed. Govt ownership of oil and gas resources, including exploration and production rights available to investors

Part 1 deals with laws and regulations governing Federal Government ownership of oil and gas resources in Nigeria. This part also captures the judicial interpretation of Federal ownership of oil and gas resources including the extent and size of such ownership in the well known “Resource Control” case involving the A.G Federation V A.G Abia State (N0. 2) (2002) 6 N.W.L.R Part 764 pages 542-905, ET this case, the Supreme Court interpreted many oil and gas issues including the determination of the seaward boundary of a littoral state within the federation of Nigeria for the purpose of computing the revenue accruing to the Federation Account directly from oil and gas resources in those littoral states

Legal framework for evacuation and transportation of Nigerian crude from oil fields, including shipment (export/domestic)

The focus of this part  is on the laws, regulations, cases and materials governing evacuation, transportation including shipping of crude oil in Nigeria from oil fields to storage tanks via Pipelines and Oil Terminals. Also covered here are the laws and regulations on transportation of crude oil by Ocean Tankers as well as Domestic Coastal and Inland Shipping (Cabotage) of crude oil and other ancillary services. The author is of a strong view that the scope and applicability of the “Cabotage” Act in Nigeria covers both upstream (domestic carriage of crude oil) and downstream (domestic carriage of petroleum products).

 Legal framework for Nigeria – Sao Tome and Principe joint development of petroleum resources including exploration and production rights available to investors in the joint development zone

This part focuses on the laws and regulations governing Joint Development of Petroleum and Natural Gas between Nigeria and Sao-Tome and Principe in areas of Exclusive Economic Zones of the two countries. Covered here are the principles of Joint Development Zone (JDZ) including the legal status of JDZ Treaty in Nigeria as well as guidelines for bidding for petroleum blocks in the JDZ and petroleum exploration and production rights available to JDZ investors.

Legal framework for National participation in petroleum operations including the role of NNPC

The focus of this part is on the law governing Federal Government’s direct participation in Petroleum and Natural Gas operation in Nigeria especially the role of Nigerian National Petroleum Corporation (NNPC). Here the Laws that brought about the acquisition by NNPC of all shares, rights including petroleum exploration rights formerly held by Shell British Petroleum Company Limited

Legal framework for petroleum profits taxation and other taxation in Nigeria including royalties and fiscal incentives

This part   covers the law on taxation of companies engaged in upstream petroleum operations (Petroleum Profits Tax Act). This Act contrast sharply with Companies Income Tax Act as amended, which is a law regulating taxation of companies engaged in downstream oil and gas operations (marketing, distribution and sales of petroleum products and natural gas). This part highlights more than 30 headings regarding petroleum profits tax issues including their judicial interpretation. Of special note here are the decisions of the Supreme court of Nigeria in Shell Petroleum Development Company Limited V. Federal Board of Inland Revenue (1996) 8 N.W.L.R Part 466 page 256 on meaning of ‘Petr0leum Profits Tax’ and ‘Petroleum operations’ and Gulf Oil Company Limited V. Federal Board of Inland Revenue (1997) 7 N.W.L.R Part 514 page 535 on computation of‘ chargeable tax payable under Petroleum Profits Tax Act. Also discussed in this part is the Court of Appeal decision in Texaco Overseas Nigeria Petroleum Company V. F.B.I.R (1997) 4 N.W.L.R Part 501 pages 511.

Legal framework for natural gas development and utilisation in Nigeria, including the West African gas pipeline project.

The theme of part six is Natural Gas Development and Utilisation (upstream). And since the proposed law on downstream gas operations in Nigeria is still a bill awaiting passage in the National Assembly, downstream gas operations is not discussed in this work. It is in this part that the West African Gas Pipeline Project Act and Regulations are covered including the legal status of West African Gas Pipeline Project.

Legal framework for downstream petroleum sector covering supply, distribution, storage and marketing of petroleum products

The focus of part seven is on the laws and regulations governing downstream petroleum sector in Nigeria, (excluding gas). This part covers the legal framework for the supply, distribution, storage, marketing and sales of petroleum products including the laws governing the construction of Refineries, Pipelines as well as importation and exportation of petroleum products. Covered in this part also are the activities of Petroleum Products pricing Regulatory Agency (PPPRA), uniform rate/prices of petroleum products including activities of Petroleum Equalization Fund (PEF) and the Petroleum (Special) Trust Fund (PTF).

Legal framework for managing environmental pollution and spillage in Nigeria

The concern of Part Eight is with the laws and regulations affecting environmental pollution and spillage in the oil and gas industry. This part covers the laws on Federal Government’s policy on National Oil Spill Contingency Plan. Also covered in this part are the laws regulating the obligation of holders of OPL and OML to adopt measures to prevent pollution of inland waters, rivers, water courses and the Territorial Waters of Nigeria, the Continental Shelf as well as the Exclusive Economic Zone.

Legal framework for transparency and accountability initiative in the oil and gas industry

The theme of this part is Transparency and Accountability Initiative in Oil and Gas Revenue in Nigeria including the powers of Economic and Financial Crimes Commissions (EFCC) to investigate and punish fraudulent manipulation of statement of accounts resulting in wider payment of oil and gas revenue accruable to the Federal Government.

Legal framework for due process and fundamental a principles of public procurement and contract award in Nigeria ’s oil and gas industry

In this part, the work here centers around the laws governing Due Process and Fundamental Principles of Public Procurement in Nigeria’s Oil and Gas Industry especially the application of Public Procurement Act 2007 to all NNPC’s procurement contracts. Also highlighted here is the applicability of Public Procurement Act of 2007 to non-government owned oil and gas enterprises which derive at least 35 per cent of funds appropriated or proposed to be appropriated for any procurement contract from the Federation share of Consolidated Revenue Fund.

Legal framework for oil and gas export free zone scheme in Nigeria

Here the laws and regulations governing oil and gas export free zone scheme in Nigeria is (the focus including the legal procedure for obtaining oil and gas free zone license. A covered under this part are the laws regulating health, safety and environmental matters within the oil and gas free zones.

Legal framework for investment protection and guarantees in Nigeria ’s oil and gas industry

The theme of part 12 is Investment Protection, Assurances and Guarantees for companies engaged in oil and gas activities in Nigeria . Also covered here are the laws regulating the activities and operations of Nigeria LNG. This part examines the recent decision of the Federal High Court ( Port Harcourt ) in a case involving Niger Delta Development Commission (NDDC) V. Nigeria LNG (unreported Suit No. FHC/P/CS/361/2007) over whether or not NDDC is entitled to receive from Nigeria LNG, 3% of the latter’s total annual budget for the years 2001, 2002, 2003 & 2004 and thereafter.

Legal framework for oil and gas communities in the Niger Delta

Part 13 focuses on Niger Delta Development Commission Act, the law regulating oil and gas community issues in the Niger Delta area of Nigeria , including its purpose, funding as well as method of rotation of the office of Chairman of the Commission.

Legal framework for human resources development and capacity development in oil and gas industry

The theme of Part I4 is on Human Resource Development and Capacity Building in the oil and gas industry. Here the law establishing the Petroleum Technology Development Fund (PTDF) as well as the Petroleum Training Institute (PTI) is covered in this part.

Legal framework for strategic planning and survellan of oil and gas policies in Nigeria

The theme on part 15 is on strategic planning, surveillance and co-ordination of National policies in oil and gas and other energy sources in Nigeria. Here the law establishing the Energy Commission of Nigeria is covered.

 Legal framework for the control and management of oil and gas development funds in Nigeria

This is the concluding part of this work and it focuses on the Finance (Control and Management) Act which is designed to provide legal framework for the control and management of public finances and funding in Nigeria as it affects the control and management of Petroleum Technology Development Fund (PTDF), especially the mechanism for funding, budgeting and disbursement of PTDF including the oversight constitutional powers of the National Assembly as contained in sections 88 and 89 of the 1999 Constitution over PTDF.



Professor Maxwell Gidado, SAN

Nigerian Laws, Cases and Materials on Oil and Gas

An Alumna of the University of Aberdeen - Interview on 'Nigerian Law, Cases and Materials on Oil and Gas'

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