COURT DISMISSES SUIT BY MOBIL AGAINST NMDPRA, AFFIRMING AUTHORITY’S POWER TO REGULATE OPERATIONS OF IOCs
The Hon. Justice Inyang Ekwo of the Federal High Court sitting in Abuja has dismissed a lawsuit brought by Mobil Producing Nigeria Unlimited (Mobil) against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Mobil had approached the court to challenge the competence of NMDPRA to regulate certain aspects of its operations like butane lifting which it maintained were integrated to its Oil Mining Leases (OMLs) and thus within the exclusive regulatory purview of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). By its Originating Summons filed on 19 June 2023 in Suit No.FHC/ABJ/CS/844/2023, the company’s lawyers argued that the implicated operations were designated as ‘integrated petroleum operations’ in accordance with the Petroleum Industry Act 2021 (PIA) and consequently prayed the court to restrain NMDPRA from all attempts towards licensing or any other form of regulation of those operations.
In response, NMDPRA through its lawyers Ama Atuwewe (SAN) and Dr. Emeka Akabogu argued that NMDPRA was empowered under the PIA to regulate all midstream and downstream petroleum operations in Nigeria and that the particular operations in question were outside of what the law envisaged as ‘integrated petroleum operations’. After the hearing of the case, the court reserved its judgment for 25th October 2023.
In a rather dramatic twist, Mobil on the day fixed for judgment, applied to discontinue the proceedings, and moved the court to strike out the suit. In response, Counsel to the Authority moved the court to dismiss the suit, arguing that issues have been joined and there was need for a settled precedent from the court. The court ruled that the proper order to make in the circumstances is one for dismissal of the suit.
This ruling holds considerable significance for the petroleum industry in Nigeria as it affirms the regulatory mandate of the NMDPRA as set out in the Petroleum Industry Act 2021 over all midstream and downstream operations including those of international oil companies involved in such activities.
Responding to the development, NMDPRA’s counsel, Dr. Emeka Akabogu stated that the win is also a big step in the country’s efforts against oil theft, as it ensures separate monitoring of activities in the different streams of the oil and gas value chain undertaken by related interests.
The ruling of the court is also in consonance with the directive of Mr President that NMDPRA shall be the exlusive Technical and Commercial Regulator in respect of the petroleum operations and facilities from the exit of the crude oil export terminals and the entry gate of the natural gas processing plant.
