Nigeria is Africa’s biggest oil producer but a marginal gas player. In March 2021, the Nigerian government declared the 2020s, Nigeria’s ‘decade of gas’.

The decade of gas policy has signalled Nigeria’s renewed focus on gas as the fuel of choice for powering Nigeria’s industrial ambitions. According to the plan, the Federal Government’s target is to deliver 10 projects that would significantly impact the economy; attract $14 billion in foreign direct investment, raise $12 billion in revenue through royalties and taxes, and create two million jobs by 2030.

Nigeria has the tenth largest gas reserves globally with an estimated 208 trillion cubic feet (tcf) of proven gas reserves according to the Nigerian National Petroleum Corporation, NNPC.

Despite this huge potential, gas production remains relatively low. In 2021, Nigeria produced 1.62 tcf of gas, 50.7 percent of which was exported as liquefied natural gas (LNG), behind Algeria (3.56 tcf) and Egypt (2.4 tcf) who have much smaller reserves.

Nigeria hopes to be a major supplier to Europe as the continent shifts away from Russian gas.

Yet significant challenges remain. Developing a holistic solution to help ensure energy access and security will require improving investor confidence in the sector. Developing a local gas market will require stakeholders and consumers to be confident that gas flows won’t stop abruptly.

The Decade of Gas so Far

Nigeria has implemented several policies aimed at increasing the domestic utilization of liquefied petroleum gas (LPG), compressed natural gas (CNG), and gas-to-power. Some have focused on reducing and commercializing gas flares and developing industrial gas markets.

Nigeria’s energy transition plan sees gas as a key transition fuel that will help meet energy needs in the short term.

In 2020, the NNPC began developing its most ambitious gas project, the Ajaokuta-Kaduna-Kano pipeline. The 614km pipeline is a massive $2.5 billion project that will transport gas from production centers in the south to industrial clusters and production centers in the north.

The pipeline will also provide gas for three planned thermal power stations in Abuja (1,350MW), Kaduna (900MW), and Kano (1,350MW) as well as feedstock for industrial production of petrochemicals and fertilizers. The project was slated for completion in the first quarter of 2023, but the NNPC has extended this timeline to the third quarter of 2023 due to what it described as security and terrain challenges. 

Other key projects being developed include a second Escravos to Lagos Pipeline System which will double the capacity of the current transport network improving supply to about 9 power plants located in its corridor. The Obiafu – Obrikom – Oben (OB3) gas line is also being developed and will improve supply to petrochemical industries. The NNPC’s ultimate goal is to ensure domestic gas utilization of 5 billion standard cubic feet (bscf) daily.

The government is promoting CNG as the key fuel for transport. In 2022, the NNPC announced a plan to convert about 500,000 petrol and diesel vehicles into CNG-powered and deploy 580 gas-filling stations over 18 months. This plan also extends to replacing small diesel and petrol-powered generators, the main energy source for off-grid and underserved customers, with gas-powered alternatives.

Overcoming Market Challenges

To fully achieve the benefits of these initiatives and projects, the government needs to provide solutions to some of the policy and market challenges that have hampered domestic gas utilization.

Gas-fired power plants constitute about 87 percent (about 14GW) of Nigeria’s total installed power generation capacity. However, plants routinely suffer from gas supply constraints. This challenge is linked to the overall lack of liquidity in the power sector and also to the fact that the domestic gas market is a regulated one. When power generation companies are unable to pay and the domestic gas pricing is unattractive, gas suppliers prioritize international buyers that can pay.

A related problem is that there is no incentive for these producers to invest in infrastructure for domestic gas supply. Investments will be limited to off-shore basins that are near export ports. Activated and enforced gas sale and purchase contracts are necessary to make gas projects bankable and spur private-sector investment.

Another key challenge that disrupts gas flow is the sabotage of pipelines by acts of vandalism. Although instances of vandalism have decreased from its height in the 2010s, it remains a huge issue that affects the country, costing money in not only lost products but also repairs. A 2014 report from the U.K.-based Stakeholder Democracy Network (SDN), notes that pipeline vandalism costs oil companies $14bn annually. In October 2022, NLNG declared a force majeure, citing the unavailability of major liquids evacuation pipelines due to sabotage and vandalism.

Developing a holistic solution to natural gas production and supply in Nigeria will ensure energy security and improve investor confidence in the sector. A holisitic solution that creates a thriving local gas market for the power sector will also require more confident stakeholders and consumers.


A most significant Nigerian gas utilisation project is the Nigeria-Morocco Gas Pipeline which was proposed in a December 2016 agreement between the Nigerian National Petroleum Corporation (NNPC) and the Moroccan Office National des Hydrocarbures et des Mines (National Board of Hydrocarbons and Mines) (ONHYM).

The following are its key details:

  • Capacity: 30 billion cubic m/year
  • Length: 5,660 km
  • Cost: US$25 billion

The pipeline would connect Nigerian gas to every coastal country in West Africa (Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Mauritania), ending at Tangiers, Morocco, and Cádiz, Spain.

It would be an extension of the existing West African Gas Pipeline, which already connects Nigeria with Benin, Togo, and Ghana. Industry experts have stated that this is a preferred route rather than the Trans-Saharan Gas Pipeline, arguing that the Trans-Saharan Gas Pipeline would have to pass through a region with significant militant activity.

Upon completion, the gas pipeline will be the world’s longest offshore pipeline second longest pipeline overall. Based on the 25-year estimate given in 2017, construction will be completed by 2046. In June 2023 it was reported that Côte d’Ivoire, Liberia, Guinea, and Benin had signed agreements with Morocco and Nigeria to participate in the Nigeria-Morocco gas pipeline project. The signing ceremony took place at the Economic Community of West African States (ECOWAS) headquarters in Lagos, Nigeria, alongside the steering committee meeting for the Nigeria-Morocco gas pipeline project, which was attended by representatives from ECOWAS and all the relevant countries. Following this development, a total of ten states are now involved in the project, building upon the agreements previously signed with ECOWAS, Mauritania, Senegal, Gambia, Guinea-Bissau, Sierra Leone, and Ghana.

Nigeria’s Exchange Rate Volatility and Foreign Direct Investment : Is This A Conundrum With a Solution in Sight? 

In 2024, exchange rate volatility has reached unprecedented levels. With unprecedented erosions of Naira values against foreign currencies particularly, the US Dollar, GBP Sterling and the Euro. Februry 

At the commencement of the term of the current government in May 2023, the Central Bank of Nigeria (CBN) as a key part of the new government’s economic policy measures, annouced changes to the way the country’s foreign exchange market would work. Foreign currencies are to be bought and sold at rates determined by the market and not by the Central Bank. 

This signaled an intention of the government to allow market forces to determine the value of the Naira. The intentions were very well placed in view of the prevailing regime of multiple exchange rates in the previous government in 2015 – 2023.

Under the multiple exchange rate regime, foreign and domestic investor confidence had been eroded which induced foreign exchange rate volatility. In June 2023, the International Monetary Fund (IMF) repeatedly called on Nigeria to end its multiple rate regime. The huge gap between the official and unofficial rates caused severe shortages of foreign exchange by discouraging supply from official sources. 

This has had major inflationary implications on the Nigerian economy as well as severe adverse effects on Foreign Direct Investment (FDI) 

What is the genesis of the volatility and are there solutions in sight?



This is not the first time Nigeria will be liberalising its foreign exchange market. The first was in 1986; further efforts followed in 1995, 1999 and 2016. All were marred by various impediments in implementation. 

In 2016, the float was half-hearted. The Governor of the CBN stated then that the government would retain the official rate for “critical transactions”. The intention also was for the CBN to intervene regularly according to the dynamics of the market as the market continued to evolve steadily and as more money was expected to come into the country.

The float became official in June 20, 2016, and the Naira, of course, tumbled to ₦280/$1 just 1 day later. The black market however responded more favourably, moving from ₦347/$1 to ₦337/$1. The CBN was optimistic that official and black markets would merge and the naira would settle around ₦250/$1.

In truth it was never really a float. The official window for “critical transactions” was never defined and the Naira did not rise and fall as it should in a free market.The 2016 naira float policy did not meet a ready and able market that Nigerians could leverage, and foreign exchange speculators took every opportunity to create bubbles in the market which eventually led to Naira rates dropping further.

By 2017, the Naira went up to ₦300/$1, and the black market did not merge with interbank rates as hoped. It reached an all-time low of ₦525/$1. 

From 2015 – 2023, multiple exchange rates signaled a dysfunctional economy. It eroded investor confidence and induced foreign exchange rate volatility. In June 2023, the International Monetary Fund (IMF) repeatedly called on Nigeria to end its multiple rate regime. The huge gap between the official and unofficial rates caused severe shortages of foreign exchange by discouraging supply through official channels and encouraging bad actors to exploit tand widen the gap between the exchange official and parallel rates  


The last two decades have seen a steady drop in FDI and this together with the foreign exchange volatility is attibutable to a variety of problems in the Nigerian business environment including certainy of regulation 

The United Nations Conference on Trade and Development (UNCTAD) cited as the base cause, the global economic recession which had exposed Nigeria to various macroeconomic instabilities as the cause of the dip in investment flow into the country. According to the National Bureau of Statistics (NBS), Nigeria had experienced a steady decline in FDI since 2008 when the world experienced an economic global meltdown. However, before the economic meltdown, the growth of foreign direct investment in the country has had a mix trend. In this regard, although both have witnessed a declining trend, one must identify a clear dichotomy between FDI in the oil sector and FDI in the non-oil sector with the former being more resilient than the latter due to the fact that earnings are in hard currency.

A survey report from the studies by the United Nations Conference on Trade and Development (UNCTAD) indicated that FDI inflows to Nigeria fell by 27 percent i.e. from $4.7bn recorded in 2014 to $3.4bn achieved in 2015.

From 2015-2023 and coupled with the effect of COVID, the level of non-oil FDI has dropped significantly and become a major concern with notable subsidiaries of multinationals such as Paterson Zochonics (PZ) Nigeria Plc (subsidiary of PZ Cussons Plc), a 124 year old Nigerian company and a major British manufacturer of personal healthcare products and consumer goods moving to delist its shares from the Nigerian stock exchange in 2023 due to foreign exchange challenges. Another notable example is Glaxo Smith Kline (GSK) Nigeria Plc (subsidiary of GSK a global pharmaceuticals company) deciding to cease doing business in Nigeria, 


Due to the absence of local production and the recent liberalisation of commodity imports, the IMF in its “Post Financing Assessment and Staff Report” of Febraury 2024 has warned that Nigeria faces a risk of a 33% currency depreciation in 2024 which could lead to a massive surge in inflation, reaching a peak of 44% in 2024. 

The three key problems that afflict Nigeria’s foreign exchange market are the lack of transparency, foreign exchange shortages and volatility. 

Shortages occur mainly because about 90% of Nigeria’s foreign exchange earnings come from the oil sector and 60% of government revenue come from the oil sector. Since the sharp drop in oil prices in 2020 (and even though oil prices have become more robust since 2021 to date) the foreign exchange market has remained volatile with considerable increases in foreign exchange demand in a predominantly import based economy. 

To make matters worse, much of the foreign exchange from non-oil sources (such as diaspora remittances, tourism and export of non-oil products) is channelled through the black market and not through the banking system.

However there are two perspectives that must be taken in addressing the problem, the first is the long term perspective and the second is the short term perspective, both of which must immediately be embarked upon simultaneously.


The long term solutions to the foreign exchange problem remain heavy public and private sector investment in:

  1. Addressing the infrastructure deficit Nigeria suffers such as the lack of stable and comprehensive electricity power in urban and rural areas; comprehensive and integrated road, rail water transportation for persons and goods; 
  2. Health care
  3. Educaition
  4. Local raw materials development in the agro-allied industires and the oil, gas and solid minerals sectors
  5. Import substitution by the development of local manufacturing based on local raw materials particularly for food production and the manufacture of and production of machinery, components and finished goods which are presently being imported

However, these are long term solutions, which require consistent planning and policy implementation by successive governments.


The short term perspective is of immediate importance due to the highly inflationary impact the devaluation of the Naira is having on the Nigerian economy, The last seven months have seen extraordinary and unprecedented volatility with the exchange rates dropping weekly and even daily. 

The government has, in a bid to assuage public concerns sought to address the spikes in demand for foreign exchange by a basket of short term solutions.  

Amidst calls for the federal government to tighten up monetary policy by increasing interest rates thus curbing inflation, the government is currently in a bid to reduce the spikes in the demand for foreign exchange. In furtherance of this, the government is identifying potential problem areas in government activities as well as, intervening in the official foreign exchange market and in the parallel market. 

Problem Areas 

Addressing revenue leakages

The leakages from the oil sector stemming from a lack of tranparency in the governance of the sector have led to hard currency revenue leakages. This includes a lack of proper oversight of Nigerian share of crude oil allocations under contracting arrangements with the International Oil Companies, exposing such crude oil to unlawful third party actors and the syndicated theft of crude oil.

The activities of state governments after the disbursement of money by the Federation Account Allocation Committee (FAAC) have also come under scrutiy. Such actions have contributed to the depreciation of the naira, according to data and interviews with people familiar with the matter.

It has been discovered that portions of the funds from FAAC were often changed to dollars by some governments at the parallel market, putting more pressure on the naira.

An analysis shows that from July 2023 to January 2024, the Naira depreciated in six months immediately in the parallel market after the FAAC shared money to the federal, state and local governments.

With the removal by the Federal Goverenment of fuel subsidies, more volumes of naira are being shared by the federal, state and local governments and some of these monies are changed to dollars at the parallel market.

Interventions in the Official Market

In a series of guidelines recently, the CBN ordered Deposit Money Banks to sell their excess dollar stock and maintain certain level of prudential thresholds.

The new guidelines provide that the Nett Open Position (NOP) limit of the overall foreign currency assets and liabilities of banks shall not exceed “20% short or 0% long of shareholders’ funds”. The apex bank said the move was due to concerns over the growth in foreign currency exposures of banks through their NOPs.

Delaying Oil Company Remittances

In a move aimed at stabilising the naira, the Central Bank of Nigeria (CBN) has announced a new policy restricting international oil companies (IOCs) from repatriating 100 percent of their foreign exchange proceeds abroad immediately.

The policy, which takes effect immediately in February 2024, limits IOCs to repatriate only 50 percent of their proceeds immediately while the other 50 percent will be repatriated 90 days from the day of inflow.

Policing Foreign Exchange Racketeering

The federal government is also seeking to disrupt and prevent currency racketeering, foreign exchange rate manipulation, money laundering and the financing of terrorism by stopping the proliferation of unregulated transactions. 

As a number of transactions are being done through Bureaux De Change (BDC), the federal government has through the CBN unveiled a set of regulatory guidelines titled  “REVISED REGULATORY AND SUPERVISORY GUIDELINES FOR BUREAU DE CHANGE OPERATIONS IN NIGERIA”

  1. BDCs shall be divided into two tiers, with different requirements for capital, presence, and locations.
  2. BDCs shall have a minimum capital of N2 billion for Tier 1 and N500 million for Tier 2, and other fees and deposits to be specified later
  3. Reporting requirments have been imposed on transactios over a minimum threshold of $ 10,000

The foregoing are included in a number of enumerated guidelines which are aimed at bringing BDCs under a similar supervisory and regulatory oversight as banks.

The CBN will expect these measures to have an immediate impact on the foreign exchange market. 

Our Corporate, Foreign Investment  and Capital Markets Department at F.O. Akinrele & Co. will contine to monitor these developments closely.

Nigerian Maritime Sector Developments: The Significance of the New Admiralty Jurisdiction Procedure Rules 2023

The Nigerian maritime sector has always represented a significant commercial engine of the Nigerian economy. Opportunities for Nigeria’s economic growth through linkages in global and inter-Africa supply chains through our maritime lanes remain robust and significant. 

The efficiency and adaptability of our maritime sector are thus critical and the Nigerian government has laid down a marker by prioritising the need to augment the nation’s GDP from the maritime sector.

For the first time, a Ministry of Marine and Blue Economy has been established to harness the nation’s ocean and coastal resources for economic growth. 

In line with these initiatives, the Nigerian Judiciary is also playing its role by updating the Admiralty Procedure Rules, to foster a fit-for-purpose dispute resolution mechanism for stakeholders in the sector and this is symbolised by the enactment of the Admiralty Jurisdiction Procedure Rules, 2023 (“the AJPR 2023“).

After consultation with maritime practitioners, the Admiralty Jurisdiction Procedure Rules of 2011 (“the AJPR 2011”) was repealed and replaced by the AJPR 2023 under the authority of the Honourable Chief Judge of the Federal High Court, Justice Terhiemba Tsoho, in exercise of his powers under Section 254 of the Constitution of the Federal Republic of Nigeria and Section 21 of the Admiralty Jurisdiction Act 1991 (AJA). 

The AJPR aims at augmenting the Admiralty Practice and Procedure at the Federal High Court, bringing it in line with global best practices and making Nigeria a regional dispute resolution hub for Africa.

Several changes have been made. The most notable are outlined below:

Notable New Provisions:


The Chief Judge has now mandated the establishment of Admiralty Divisions for the Court and designated Judges of the Federal High Court as Admiralty Judges. This is significant in ensuring that specialist Judges focus on maritime cases exclusively.


The establishment of the Admiralty Registry of the Admiralty Division of the Court and the empowerment of the Admiralty Marshal (or his substitute) to head the Admiralty Registry of each Admiralty Division further reinforces the clear objective of promoting maritime specialisation.


The AJPR 2023, in preserving the position that an admiralty action in rem may be commenced in the Judicial Division of the Court in which the res may be found or is expected to arrive. have introduced two novel provisions:

  1.  Where an admiralty action in rem is not commenced in a Judicial Division where the subject of the maritime (the “res”) is located or expected to arrive. provision is now made for the transfer of the warrant of arrest to the appropriate Judicial Division where the subject of the action is located or expected to arrive, and the warrant of arrest shall remain enforceable against the res in any Judicial Division in which the res may be located. 
  2. Where a suit is commenced in any Judicial Division other than the Judicial Division where it ought to be commenced, the Rules provide that the suit may be heard and determined in that Judicial Division unless the Court directs otherwise. 


The AJPR 2023 has abolished the previous requirement of specifying the “relevant person” as a defendant, in an action in rem in relation to a proprietary maritime claim. The only parties to be specified as the defendant in the Writ of Summons are the Ship or Other property. However, in an action in rem in relation to a general maritime claim, as in addition to specifying the ship or other property, a relevant person must be specified as a defendant.

This helps to clear up unneccsary technicalities that have developed in recent years, which have unfortunately impeded the progress of maritime actions.


The AJPR 2023, mandates that a Writ of Summons, a Court order of arrest, and a warrant of arrest in an action in rem, be served through physical service. 

Additionally, the Rules have now accomodated a digital approach allowing for other Court Processes in an action in rem to be served on the defendant through the defendant’s email address. 

Also, a legal practitioner in representing the defendant, can be properly served with such other Court Processes.


The AJPR 2023, provides that where an action in rem is commenced against the ship or other property which has been abandoned in Nigeria or in personam is filed against the defendant who does not reside in or carry on business in Nigeria through an agent, the Court may order service on such defendant or owner of ship or other property and such service shall be done at the last known address of the defendants business and which shall be delivered by Courier between Nigeria and in the Country of business. 

Alternatively, the service shall be by any mode as accepted by the Court.



The AJPR 2023 introduces electronic filing (“e-filing) that has been in use in the judicial divisions of state high court and in major cities in country.

There are provisions for the physical filings (to be done at the Admiralty Registry) or e-filing (to be done at the Admiralty E-filing Unit) as regards, ex parte applications for a warrant arrest of a ship or other property. Such e-filed ex-parte applications must be in PDF (Portable Document Format) and shall be sent to the email address as shall be provided by the Admiralty Registry. E-filing, fees payable for the court processes shall be assessed and paid online.


The AJPR 2023 mandates that where it is practicable, such application shall be heard and determined within  a twenty-four (24) hour timeline from the date of filing, and such proceedings may be conducted physically or virtually on any day, including Sundays and public holidays.


The AJPR 2023 now requires that before a warrant of arrest is issued, the applicant must apply for a search to be made in the caveat book to determine whether or not there is a caveat against the arrest of such ship or other property. 

Upon such application for search, the Admiralty Registry is to issue a report of the search and such report shall be in Form 8A (Report of Search of Caveat Against Arrest Register).

This is an improvement from the uncertain and controversial position under the AJPR 2011, where a prospective plaintiff  was required to file an affidavit stating whether or not there is a caveat against the arrest of such ship or other property. This position was susceptible to manipulation as in many cases, the Court may not be provided with the correct information. 


The AJPR 2023 introduces a simplified process of obtaining a warrant of arrest for ships or property in support of foreign court proceedings or arbitration proceedings within or outside Nigeria. The provision ensures efficiency by allowing the Applicant to file such an application without commencing a separate action. The Rules mandate that such an application will be accompanied by the certified true copy (CTC) of the Court or Arbitration Processes, and a duly notarised undertaking as to indemnity if later found that the order for arrest should not have been made.


The AJPR 2023 establishes a new and progressive legal regime for Admiralty Proceedings in Nigeria. steering it into alignment with contemporary maritime realities. 

It is advised that all stakeholders in the maritime sector, including legal practitioners, shipping companies, and other relevant parties, familiarize themselves with the Rules to effectively navigate the intricacies of maritime legal proceedings.

The Nigerian Electricity Amendment Act 2024 : “ Power to the People at Last?”

The Electricity Act Amendment (EAA) bill, 2024, was signed into law on 9 February 2024. It seeks to reform the Nigerian electricity sector and addresses the challenges of power generation, transmission, distribution, and consumption. 

The EAA introduces several changes and innovations to the Electricity Regulation Act, 2006, which was the previous legal framework for the electricity sector. 

Key objectives of the EAA are:

  1. Promoting the development and environmental protection of host communities of power generating companies (GENCOs) by setting aside 5% of their annual operating expenditures for infrastructure projects in the host communities.
  • Establishing the Transmission System Operator SOC Ltd, a new entity that will be responsible for the operation, maintenance, and expansion of the national grid, as well as the coordination and dispatch of electricity from various sources.
  • Creating an open market platform that will allow for competitive electricity trading among GENCOs, distribution companies (DISCOs), eligible customers, and other market participants.
  • Assigning the duties, powers, and functions of the Transmission System Operator SOC Ltd to the National Transmission Company South Africa SOC Ltd, a joint venture between the Nigerian and South African governments, which will own and manage the transmission assets and infrastructure.
  • Enhancing the regulatory and enforcement powers of the National Energy Regulator (NER), which will oversee and monitor the electricity sector and ensure compliance with the provisions of the Act.

Key Benefits of the EAA are:

  1. Improving the quality and reliability of electricity supply and increasing the availability and diversity of power sources.
  1. Fostering the development and welfare of host communities, as it will provide them with funds and opportunities for infrastructure projects, such as roads, schools, health centers, and water supply.
  1. Stimulating the growth and competitiveness of the electricity market, as it will encourage more investment and innovation in the power sector and create more choices and options for consumers and producers of electricity.
  1. Enhancing the transparency and accountability of the electricity sector, as it will ensure that the NER and other stakeholders adhere to the principles and standards of good governance, and that the electricity tariffs and prices reflect the true costs and benefits of electricity.

Key challenges and Risks to sector and economy at large are:

  1. It may face legal and political opposition from some stakeholders, such as the existing GENCOs and DISCOs, who may perceive the bill as a threat to their interests and profits, and may challenge its constitutionality and validity in court.
  2. It may encounter technical and operational difficulties, such as the lack of adequate infrastructure and capacity, the need for coordination and cooperation among various entities and agencies, and the possibility of cyberattacks and sabotage on the transmission system and the open market platform.
  3. It may require significant financial and human resources, such as the funding and expertise needed to implement and sustain the reforms and innovations introduced by the Act, and the compensation and training needed for the affected workers and communities.

The implementation of the EAA will be monitored by industry operators and prospective investors. It is a positive step in the right direction and if properly implemented, will bring rapid development to the electricity sector.


In 2022, Mr. Anthony Nkadi, a longstanding partner in the Shipping and Transport Group was appointed Head of Regional Shipping and Transport Projects Group (RSTPG). 

This appointment combines his expertise as a seasoned maritime practitioner with his considerable aviation law experience, which have critically addressed the strategic needs, critical opportunities and challenges of the firm’s clients.

This appointment marks another milestone in his career, which has been defined by hard work, commitment and professionalism.


In 2022, Benson Akunya, our litigation partner of considerable years, recorded a number of milestones in our core practice areas and we have the pleasure of announcing his appointment into the firm’s Regional Litigation Projects Group (RLPG). Benson Akunya continues to make substantial inroads in expanding the firm’s core practice areas of litigation, arbitration and dispute resolution, demonstrating the firm’s renewed focus on the firm’s strategic growth priorities in Nigeria and the African region.

This appointment has been characterised by his hard work, commitment and professionalism.



On 29 March 2021, the Nigeria International Petroleum Summit (N.I.P.S) Pre-Summit Conference, marked the official launch of the “The Decade of Gas in Nigeria Initiative” in furtherance of the Federal Government initiative that declared January 1, 2021 to December 31, 2030 as “The Decade of Gas Development for Nigeria”.

 At a time of rising global demand for cleaner energy sources this has been viewed as a bold statement that gas development and utilization should be a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide the much-needed jobs for Nigerian citizens and eliminating energy poverty, currently affecting about 40% of the population.

The commitment to developing the gas value chain by reviewing and gazetting policies and regulations to enhance operations in the sector had been commenced under the National Gas Policy (2017).


Developments have been made in recent years in gas infrastructure development.

The Nigerian National Petroleum Company Ltd is currently deepening natural gas utilization to reduce energy poverty through the National Gas Expansion Programme and intensifying the use of petrochemicals.

The NNPC has also upscaled efforts in the gas sector through various projects like the Nigerian Liquefied Natural Gas NLNG Train 7, Ajaokuta–Kaduna–Kano Natural Gas Pipeline (AKK), OB3 and ELPS among others. The (NLNG) project since delivering its 1st LNG cargo in October 1999 continues to be the Federal Government’s arrowhead in the reduction of gas flaring in Nigeria and contributes about one per cent to Nigerian GDP, having generated $114 billion in revenues over the years, $9 billion in taxes, $18 billion in dividends to the Federal Government and $15 billion in Feed gas Purchase.

The NNPC is also expanding and integrating both domestic and regional power grids and growing the domestic gas markets through Autogas/Compressed Natural Gas/Liquified Petroleum Gas to power vehicles.

On Wednesday, February 2, at the 2022 Nigeria International Energy Summit (NIES) held in Abuja, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) newly created under the Petroleum Industry Act (2021) revealed that Nigeria’s proven natural gas reserve had risen to 209.5 Trillion Cubic Feet (TCF) as of January 1, 2022. The new figure represents a major increase of 2.97 TCF in proven natural gas reserves, which, of itself, represented a 1.42 percentage increase from the 206.53 TCF recorded on January 1, 2021.

Such growth, together with the prospects for continued increase, come at the most auspicious moment, given the possibility of buying into the current European need for alternative sourcing of gas.

In January 2002, the idea of a Trans-Saharan Natural Gas Pipeline that was first mooted in the 1970s, came alive when the Nigerian National Petroleum Corporation (NNPC) and the Algerian national oil and gas company, Sonatrach, signed a Memorandum of Understanding for preparations of the project. Aimed at enabling Europe to tap into West Africa’s abundant natural gas supplies, the pipeline included the northernmost Nigerian neighbouring country of the Republic of the Niger for two excellent rationales. The pipeline was going to link through its borders to get from Nigeria to Algeria and it was expected to boost exploration in Niger and expand its energy industry. The 4,128-kilometre pipeline, with 1,037 kilometres in Nigeria, 841 kilometres in Niger, and 2,310 kilometres in Algeria, and a capacity of 30 billion cubic metres of natural gas per year, will connect the Warri region in southern Nigeria, through the length of Niger to the town of Hassi R’Mel in northern Algeria, where it will connect to existing Trans-Mediterranean, Maghreb-Europe, Medgaz, and Galsi Pipelines, allowing Europe to tap into West Africa’s abundant natural gas reserves and diversifying its supply.


Russia’s invasion of Ukraine has opened up opportunities for gas rich nations in Africa to tap from the multi-billion-dollar market.

 Russia which accounted for about 45 per cent of the Europe’s gas imports and 40 per cent of its entire gas consumption is facing huge economic sanctions as Europe seeks to reduce dependence on their gas by 80 per cent by the end of 2022.

Nigeria has been described as a gas nation with 206.53 trillion cubic feet of proven gas deposit and hopes to use the energy source as its transition fuel.

The scramble for African gas has begun as Italy’s Prime Minister Mario Draghi on Monday, visited Algeria over diversifying gas supply mix. Italy depends on Russia for 40 per cent of gas imports.

Nigeria has Africa’s biggest proven gas reserves and ninth in the world, according to the United States Energy Information Administration.

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) newly created under the Petroleum Industry Act (2021), Mr Gbenga Komolafe said, “The situation in Ukraine has actually presented a huge opportunity for Nigeria to occupy the market space in terms of the gas supply. I believe that is possible and as a regulator, we are doing everything possible to ensure that Nigeria is able to fulfil that obligation”.


In 2022, Adam Smith International through its subsidiary, the Nigerian Infrastructure Advisory Facility (NIAF) renewed the engagement of F.O. Akinrele & Co to act as legal consultants in NIAF II as it seeks to transform the Nigerian infrastructure landscape.

F.O. Akinrele & Co shall continue to bring to bear, it’s global expertise in providing legal and regulatory roadmaps towards the implementation of large-scale infrastructure interventions in public road, water transportation and the urban regeneration of residential and business developments.

The infrastructure practice has been recognized for its work on a variety of integrated transportation and housing infrastructure developments, focusing on World Bank and UNCHR intervention programmes. F.O. Akinrele & Co. has advised extensively on Public-Private Partnerships including:

Lagos Waterways
Ogun State Bus and Mass Transit
Ogun/Lagos State Road Transport Network

Rendeavour Nigeria Alaro City Project development site is located on 1,000 ha (2,470 acres) within the Lekki Free Zone, the largest free zone in West Africa. The site is adjacent to the approved location for the proposed Lekki International Airport and in close proximity to the deep seaport and a number of planned industrial developments.


  1. Introduction:

Arbitration is a process by which disputes or difference between two or more parties as to their mutual legal rights and liabilities is referred to and determined judicially with binding effect by the application of the law by one or more persons (the arbitral tribunal) instead of by a court.[1]

An arbitration agreement is therefore where two or more persons covenant that a dispute or a potential dispute between them shall be resolved and decided in a legally binding way by one or more impartial persons in a judicial manner, upon evidence put before him or them. The agreement is called an arbitration agreement or a submission to an arbitral proceeding when after a dispute has arisen, it is put before such person or persons for decision. The procedure is called arbitration and the decision when made is called an award.[2]

It is apposite to note that arbitration may either be voluntary or compulsory. In other words, it may be by parties’ agreement or by statutes. A voluntary arbitration is by mutual consent of the parties whilst a compulsory arbitration is that which is demanded by the provision of the statute.

2.    Meaning and test of ‘dispute’ for purposes of arbitration:

The word dispute means contention, discord, conflict, friction and antagonism. It also implies a conflict or controversy. If there was concord and harmony, then the parties have no valid legal basis to seek a reference to arbitration. Our apex Court has defined dispute to mean “act of arguing against, controversy, debate, contention as to right, claims and the like or on a matter of opinion.”[3]

A matter shall be referred to arbitration when it becomes clear or is to be interpreted to mean that a difference or dispute exists between the contending parties. Therefore, where a party admits liability of an existing debt but simply defaults to pay, or when a cause of action has been extinguished owing to the death of a party embedded in the Latin maxim, actio personalis noritur cum persona, then there is no dispute to arbitrate upon or relevant party to arbitrate with. The conflict which the parties to an arbitration agreement agree to refer to must consists of a justiciable issue triable civilly. A fair test of this is whether the difference can be compromised lawfully by way of accord and satisfaction.[4]

The next step is to determine whether the dispute or difference necessarily arises from or it is connected with the clause contained in the agreement i.e. it falls squarely within the scope of the parties’ agreement. If a party to an agreement has compromised his position by conceding to numerous alternative remedies to the other party, other than resort to arbitration, and by showing an intention to compromise, to an act of the party which he is complaining about, he has, in consequence, robbed himself of competence or premise of referring the subject matter of complaint to arbitration.[5]

3.    Arbitrable Disputes:

It is a general perception that any agreement that contains an arbitration clause shows a clear and unmistaken indication that the contract requires the parties to resolve their disputes through an arbitration process. Unarguably, arbitration is generally encouraged in Nigeria in particular and the international community in general because arbitration clauses reduce the court dockets to resolve disputes. Therefore, in keeping with the sanctity of agreements, the law is enthusiastic to ensure the validity of arbitration clauses notwithstanding any apparent inadequacy or lack in the normal formal language with legal contracts.

Hence, once parties covenant in their agreement to resolve their dispute through arbitration and an issue is perceived or is to be interpreted to mean a difference or dispute exists, such dispute shall be referred to arbitration. The difference or dispute must, however, arise from the clauses contained in the agreement i.e. fall within the scope of the parties’ agreement. Therefore, it is not every dispute or difference that can be referred to arbitration. The Disputes must be capable of being disposed of judicially, in a civil form. These disputes include all matters in controversy about any real or personal property, disputes as to whether a contract has been breached by either party thereto, or whether one or both parties have been discharged from performance thereof.[6]

Sections 48 (b) (i) & (ii) and 52 (2) (ii) of the Arbitration and Conciliation Act, CAP A18, Laws of Federal Republic of Nigeria[7] provide that even when an award has been procured and it becomes clear that an agreement on which the arbitral award was premised on arose from an invalid contract or the subject matter of the dispute is not capable of settlement or is contrary to public policy, such an award is bound to be set aside. This, therefore, reinforces the position that the dispute must be capable of settlement before it qualifies as an arbitrable dispute. This is also the same position in international arbitration under Chapter VII, Article 34 (2) b) and Chapter VIII, Article 36 1) a) i) & 1 b) of UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006.[8]

4.    Matters that cannot be referred to Arbitration:

It is trite that the disputes, which are the subject of an arbitration agreement, must not cover matters, which by the law of the State are not allowed to be settled privately or by arbitration usually because this will be contrary to public policy.[9]

It is manifestly clear that the following categories of matters cannot be the subject of an arbitration agreement as enunciated by the Nigerian Supreme Court and therefore cannot be referred to arbitration: –

  1. an indictment for an offence of a public nature;
  2. disputes arising out of an illegal contract;
  3. disputes arising under agreements that are void as being by way of gaming or wagering;
  4. disputes leading to a change of status, such as a divorce petition;
  5. any agreement purporting to give an arbitrator the right to give judgment in Therefore, a criminal matter, like the allegation of fraud does not admit of settlement by arbitration. This is because these issues are a matter of public concern. It is contrary to public policy to compromise such disputes.[10]

Similarly, the Nigerian Court of Appeal has held in two decisions[11] in Esso Petroleum and Production Nigeria Ltd & Anor. (SNEPCO) vs. NNPC unreported Appeal No. CA/A/507/2012; delivered on 22 July 2016 and Shell (Nig.) Exploration and Production Ltd & 3 others vs. Federal Inland Revenue Service unreported Appeal No. CA/A/208/2012; delivered on 31 August 2016 that tax disputes arising from a Production Sharing Contract (PSC) are not arbitrable because the subject matter of the dispute is within the exclusive jurisdiction of the Federal High Court. The rationale for the above decisions seems to appear that it may be contrary to public policy to compromise the revenues due and payable to the government. These decisions are currently subject of appeals to the final Court in Nigeria. Until then, they remain the authority that tax disputes are not arbitrable.

5.    Conclusion:

It is pertinent to note that by the provisions of Section 2 of the Arbitration and Conciliation Act 1988 (ACA). (Cap A18 Laws of the Federation of Nigeria 2004)[12] an

arbitration agreement shall be irrevocable except by agreement of the parties, or by leave of Court, or a Judge. Consequently, the mere fact that parties agree to proceed to arbitration once there is a dispute does not ipso facto make the agreement to arbitrate irrevocable because not all disputes are arbitrable. The disputes must be triable civilly. It should not be illegal or tainted with a crime or fraud.

However, it is worthy of mention that the right to go for arbitration is a personal right. It is not a constitutional right. Therefore, it can be waived by either of the parties to the agreement expressly or by contract, more particularly where the two contending parties submit their disputes to Court for determination.[13]


[1] Miss Nigeria –v- Oyedale (1960) NCLR 191

[2] C. N. Onuselogu Enterprises Ltd. -v- Afribank (Nigeria) Plc. (2005) 12 NWLR (Pt. 940) 577

[3] Plateau State & Anor. v. AG Federation & Anor.(2006) LPELR-2921(SC)

[4] Chief Felix K. Ogunwale v. Syrian Arab Republic (2002) 9 NWLR (Pt. 771) 127

[5] United World Ltd Inc. –v- MTS Ltd (1998) 10 NWLR (Pt.568) 106.

[6] BCC Tropical Nigeria Ltd. v. The Government of Yobe State of Nigeria & Anor. (2011) LPELR-9230 (CA).

[7] Sections 48 (b) (i) & (ii) and 52 (2) (ii) of the Arbitration and Conciliation Act, CAP A18, Laws of Federal Republic of Nigeria

[8] Chapter VII, Article 34 (2) b) and Chapter VIII, Article 36 1) a) i) & 1 b) of UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006

[9] B. J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (2002) LPELR- 12175(CA).

[10] Kano State Urban Development Board V. Fanz Construction Ltd. (1990) 4 NWLR (PT.142) 1 at 32-33.

[11] Esso Petroleum and Production Nigeria Ltd & Anor. (SNEPCO) vs. NNPC unreported Appeal No. CA/A/507/2012; delivered on 22 July 2016 and Shell (Nig.) Exploration and Production Ltd & 3 others vs. Federal Inland Revenue Service unreported Appeal No. CA/A/208/2012

[12] Section 2 of the Arbitration and Conciliation Act 1988 (ACA). (Cap A18 Laws of the Federation of Nigeria 2004)

[13] Kurubo v. Zach-Motison (Nig.) Limited (1992) 5 NWLR (Pt. 239) 102.


In 2021, the most significant development in the energy sector was the enactment of the Petroleum Industry Act (PIA), bringing to a close a 20-year effort to reform the Nigerian oil and gas sector, with the aim of overhauling the regulation and governance of the oil and gas industry.

A lot has changed in the sector domestically and globally since the reform efforts began. The number of indigenous oil and gas firms has grown, but so has the number of oil-producing countries in Africa. Militancy in oil-rich communities, while remaining, has diminished. Concerns over climate change have fuelled aggressive efforts to reduce global consumption of fossil fuels, driving divestment from the Nigerian oil and gas sector by international companies and institutions.

The PIA represents a new beginning and an effort to meet the changes in the oil and gas environment. In 2019, the oil and gas sector accounted for about 5.8 percent of Nigeria’s real GDP and was responsible for 95 percent of Nigeria’s foreign exchange earnings and 80 percent of its budget revenues. The law is therefore far-reaching in its remit; however, it is complex, and serious concerns remain as regards its implementation.

If well implemented, the PIA can represent an international standard for natural resource management, with clear and separate roles for the subsectors of the industry; consisting of:

  1. The existence of a commercially oriented and profit-driven national petroleum company;
  2. The codification of transparency, good governance, and accountability in the administration of the petroleum resources of Nigeria.
  3. The economic and social development of host communities; environmental remediation; and a business environment conducive for oil and gas operations to thrive in the country.

The PIA which embodies 5 Chapters, 319 Sections, and 8 Schedules, was enacted to provide for the legal, governance, regulatory, and fiscal framework for Nigerian petroleum industry, the establishment, and development of and other related matters in the upstream, midstream and downstream sectors of the petroleum industry. It, therefore created an array of provisions and innovations that will affect the private, public sector and stakeholders in the oil and gas industry.

Key provisions

Dual Regulatory and Governance Architecture


The Act establishes dual regulators for the petroleum industry. One is called the Nigerian Upstream Petroleum Regulatory Commission NUPRC (the “Commission”), which is a body corporate with perpetual succession whose functions are limited to only the upstream petroleum activities as provided for in Section 4 of the Act, which provides that “the Commission is responsible for the technical and commercial regulation of the upstream petroleum operations”. The Commission is also established to ensure compliance with all applicable laws and regulations governing upstream petroleum operations.


The other regulatory agency under Section 29 of the Act is the Nigerian Midstream and Downstream Petroleum Authority – NMDPRA (the “Authority”), responsible for the technical and commercial regulation of the midstream and downstream petroleum operations in the petroleum industry as provided under Section 29(3) of the Act.


The PIA commercialises the perennially loss-making state-owned enterprise, the Nigerian National Petroleum Company (NNPC), turning it into the NNPC Ltd, a quasi-commercial entity the ownership of which shares shall be vested with the government, and the ministries of Finance and Petroleum, who shall hold the shares on behalf of the government.

Pursuant to the PIA’s provisions, the president of Nigeria will appoint the president of NNPC Ltd as well as heads and members of the regulatory agencies. Separately, the minister of petroleum, then, will head the industry with a wide range of powers to formulate, monitor, and administer government policy under the PIA.

Importantly, the PIA provides that 30 percent of the profits of the NNPC Ltd will fund a new entity, to finance exploration in other basins in the country (Frontier Exploration Fund). Ten percent of rents on petroleum prospecting licenses and 10 percent of rents on petroleum mining leases are also assigned to Frontier exploration. The PIA is unclear on whether there will continue to be exploration in existing basins.

Host Communities

The PIA aims to address the relationship between the oil companies/operators and the host communities by creating the Host Community Development Trust Fund (HCDTF) whose purpose will be to, among others, foster sustainable prosperity, provide direct social and economic benefits from petroleum to host communities, and enhance peaceful and harmonious coexistence between licensees or lessees and host communities.

Specifically, the law stipulates that existing host community projects must be transferred to the HCDTF, and each settlor (or oil license holder) must make an annual contribution of an amount equal to 3 percent of its operating expenditure for the relevant operations from the previous year. The management committee of the trust must include one member of the host community. In addition, the act stipulates a penalty for failure to comply with host community obligations, including revocation of license.

Section 257 of the PIA also imposes the responsibility to protect oil and gas assets on host communities and stipulates that any host community that fails to protect oil assets in its community from vandalism will be held accountable for the repairs.

Fiscal framework

The PIA introduces a new tax regime, replacing the existing petroleum profits tax with a hydrocarbon tax and introducing a tax on the income of oil companies. Under this new fiscal regime, hydrocarbons—including crude oil, condensates, and natural gas liquids produced from associated gas—will be subject to taxation. Notably, crude oil from deep offshore is excluded from the tax.

A controversial provision in the PIA is the provision stating that, in the event of supply shortfalls, only companies with active refining licenses or proven track record of international crude oil and petroleum products trading will be allowed to import such products. This is a controversial provision that has been interpreted as an attempt to confer monopoly powers on a few domestic refiners.

Finally, the fiscal framework provides for penalties for gas flaring arising from midstream operations. Revenues from these penalties will accrue to the Midstream and Downstream Infrastructure Fund and will be used to finance midstream and downstream infrastructure investment.



The success of the PIA are conditional on Nigeria’s political and oil industry leaders overcoming some key challenges.

The PIA’s wording does create challenges to interpretation through imprecise language. This gives rise to ambiguity.  For example, it is unclear whether host community development trust obligations are additional to existing community levies (such as the Niger Delta development levy) or will be an aggregation of those levies. Similarly, the law is silent on the definition of “frontier basin” and host community, instead deferring to the NUPRC on the definition of frontier basin and to settlors or license holders on the definition of “host community.” These definitions are not neutral to revenue; they have revenue implications. This lack of clarity creates uncertainty and even possible disputes, especially if relevant parties define them differently.

Capacity building. This law is complex and complicated. While capacity in the oil and gas sector has been built over the years, the new legal provisions and fiscal framework will need new capacities to succeed. This challenge will be particularly acute in the new regulatory institutions; in the understanding, interpretation, and application of the law; and in the management of the funds, including the HCDTF.

There are several lingering North/South disagreements about the PIA. The bill that became the PIA was originally proposed by the executive (largely supported in the North) and passed largely along regional (North/South) lines. Leading politicians from the Niger-Delta states opposed it and many lawmakers from the South believe the bill advances Northern interests to the detriment of the South.