A Senate move to amend Nigeria’s Oil and Gas Free Zones Authority (OGFZA) Act is drawing strong resistance from operators’ free zones. They argue that it could lead to monopolistic competition in the oil and gas sector and increase the domination of the industry by Intel/Orleans. The latter is the logistics firm which has the mandate from the Nigeria Ports Authority (NPA) to manage oil and gas logistics on its behalf.

Sources have told Nigeria Politics & Security that OGFZA’s mandate is restricted to only oversee and regulate the export of oil and gas at Onne Oil and Gas Export Free Zone Authority. Furthermore, the quest to take over other oil and gas processing zones across the country is an attempt to usurp the power of the Nigeria Exports Processing Zone Authority (NEPZA) which has a wider authority and manages over 30 different free zones around the country.

Industry players have told us that if the OGFZA Amendment Bill is passed, it will restrict oil and gas imports to only Port Harcourt, Warri and Onne, all of which are managed by Intels/Orleans. This imposes a monopolistic structure on the industry and will significantly increase the cost of oil and gas imports. This means that any goods classified as oil and gas cargo must first be sent to any of the three-designated oil and gas cargo ports before it is sent to any other part of the country. Industry players say this will significantly increase the cost of oil and gas operations in the country and will reduce sector competition.

Industry sources have told Nigeria Politics & Security that the solution — which the government seems to ignore despite the reports available to it — is the establishment of a single regulatory authority for all the country’s export processing zones which all players report to.