[NEWS] FG goes tough on oil and gas zone proliferation

*Warns perpetrators to shape in or be dealt with The Federal Government has gone tough with an attempt to proliferate oil and gas operations in Nigeria, warning those behind it to shape in or be treated as law-breakers. To this end,

The OGFZA has directed all oil and gas related agencies operating outside the confines of the OGFZA to abide by the rules and regulations governing such operations or risk being taken down. The Managing Director of the Oil and Gas Free Zone Authority, Mr. Umana Okon Umana, handed down the order in a strongly worded letter he despatched to some oil and gas companies operating outside the control of the agency.

In the letter dated 17 November 2016 to the managing director of Lagos Deep Offshore & Logistics Services Limited (LADOL) and the managing director of Snake Island Integrated Free Zone (SIIFZ), Umana said the Oil and Gas Free Zones Authority has “decided to carry out the full implementation of the law and (federal government) directives” which vest control of the oil and gas free zones in the country in OGFZA.

Umana informed the managements of both LADOL and SIIFZ that “henceforth their free zones will be licensed and regulated by OGFZA by virtue of the statutory provisions in section 5(2) of the OGFZA Act and other relevant laws as well as other directives of the Government on the take-over of all Oil and Gas Free Zones in Nigeria.” He said the take-over process would take 30 days from 17 November.

The take-over process, according to the letter, is to give effect to section 5(2) of the OGFZA Act which states that “The Authority shall have power to takeover and perform such other functions being hitherto performed by NEPZA as they relate to export of oil and gas from any of the Export Processing Zones established by Nigeria Processing Zone Act.”

Secondly, the takeover is in part an implementation of Federal Government directive as contained in the Extraordinary Government Gazette No. 12 (vol. 101) of February 2014 entitled “Free Zones (Monitoring & Regulations) Order 2014.” Section 1(a)(b) of the gazetted Order states as follows: “As from the commencement of this Order, the Authority (OGFZA), in addition to its functions under the Act, shall be responsible for the:

(a) Licensing of all Oil and Gas Free Zones located within the Customs territory; and

(b) Publication of all operating standards to be observed in the Free Zone from time to time.” “It should also be noted that the Government White Paper on the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies of March 2014 upheld the autonomy of OGFZA and confirmed the mandate of OGFZA “to regulate Oil and Gas Free Zones in Nigeria.”

“In spite of the extant provisions of the law and government directives, compliance with respect to a number of Oil and Gas Free Zones was not forthcoming. “Because of the non-compliance by a few Oil and Gas Free Zones, OGFZA on 7 February 2008 sought the interpretation of the provisions of NEPZA Act and OGFZA Act from the Honourable Attorney General of the Federation and Minister of Justice as to which of the two agencies was vested with the responsibility for regulating the Oil and Gas Free Zones in Nigeria.

“On 25 March 2008 the Honourable Attorney General of the Federation gave his interpretation of the laws as follows: Para 6: Consequently, the Nigeria Export Processing Zones Authority is expected to concentrate on its functions as provided for in section 4 of the Act while Oil and Gas Free Zones Authority should have jurisdiction over Oil and Gas Free Zones in Nigeria. Para 7: In line with the contemplation of the 1996 Act, the Nigeria Export Processing Zones Authority, in accordance with section 5(2) of the Oil & Gas Export Free Zones Authority Act 1996, is expected to handover to the Oil & Gas Free Zones Authority, all functions being hitherto performed by it as they relate to the Export of Oil and Gas from any of the Nigeria Export Processing Zones and Free Zones in Nigeria. “It is for the above reasons that OGFZA has taken the step mentioned earlier to implement the law and the various directives of the Federal Government with regard to regulatory control of the Oil and Gas Free Zones in the country.

“The respective managements of the Oil and Gas Free Zones concerned have been duly informed of the commencement of the implementation process. We expect full cooperation and compliance in the interest of the nation. The Oil and Gas Free Zones Authority (OGFZA) has begun the process of implementing the provisions of its enabling law and Federal Government directives ceding regulatory control of all Oil and Gas Free Zones in the country to OGFZA.