The exposure draft of the proposed Midstream and Downstream Environmental Remediation Fund Regulation 2022 (the “Regulation”) was recently released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (“Authority”). The Regulation sets up an environmental remediation fund (“Fund”), which will be used to rehabilitate adverse environmental effects resulting from midstream and downstream petroleum operations.
Contributions to the Fund will be made by licensees conducting midstream and downstream petroleum operations, while the Authority will manage the Fund. Regulatory measures, such as competitive bidding, have been put in place to ensure the proper management and judicious dispensation of the Fund.
This commentary analyses the key provisions of the Regulation, the structure and scope of monetary contributions to the Fund, as well as its significant impacts on midstream and downstream petroleum operations in Nigeria.