Nigeria's oil investment risks regulatory uncertainty, warns NMDPRA boss

Regulatory uncertainty poses a significant threat to investment in Nigeria's petroleum industry, according to Rabiu Umar, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Umar explained that investors are willing to accept commercial risks, but unpredictable regulatory environments are a major deterrent. He stressed that clear, consistent, and predictable rules are essential for attracting and retaining capital.

"Investors are prepared to manage commercial risk. What they find far more difficult is regulatory uncertainty," Umar stated. He added that government efforts to provide incentives and reforms could be undermined if investors lack confidence in how the regulatory system will operate in practice.

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Investors are prepared to manage commercial risk. What they find far more difficult is regulatory uncertainty.

He highlighted that this is particularly critical for midstream and downstream investments in refineries, pipelines, storage, and gas infrastructure, which require long-term stability. Investors need assurance that the regulatory environment will remain stable and credible throughout the assets' operational life.

While acknowledging the Petroleum Industry Act has established a robust legal and regulatory framework, Umar emphasized the NMDPRA's role in ensuring these principles of transparency, competition, and accountability are reflected in daily operations. He also noted the importance of timely approvals, consistent regulation application, and fair, predictable decisions from institutions.

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Investments in refineries, pipelines, storage facilities and gas infrastructure are designed to operate over many years. Investors need confidence that the regulatory environment will remain stable, consistent and credible throughout the life of those assets.