NUPRC Engages Oil Industry Stakeholders On Alternative Dispute Resolution Draft Rules

The Nigerian Upstream Petrolatum Regulatory Commission (NUPRC), on Thursday, held stakeholders’ engagement and consultation session on the draft rules of procedure for the Alternative Dispute Resolution Center (ADRC).

The meeting, which was held in Lagos, had in attendance mediators, arbitrators, Lawyers In Energy Network, and legal representatives from oil and gas companies, among others.

Established in 2021, NUPRC’s ADRC offers arbitration, mediation and conciliation services for the oil and gas industry.

Speaking at the event, Commission Chief Executive of NUPRC, Engr. Gbenga Komolafe, said the establishment of ADRC was an indication of the commission’s commitment to providing a robust framework for resolving disputes in a timely manner.

Recognising the profound impact of the oil and gas industry on the stability of Nigeria’s economy, he highlighted that it was imperative that a harmonious business environment is fostered to ensure continued growth of the sector.

“We recognise that Alternative Dispute Resolution (ADR) mechanisms can play a crucial role in alleviating the burden on our courts, reducing litigation costs, and fostering a more amicable and collaborative approach to dispute resolution,” said Komolafe, who was represented by Enorense Amadasu, Executive Commissioner, Development & Production.

“As critical stakeholders, you undoubtedly recognise the profound impact of the oil and gas industry on the stability of our economy and the nation at large. Thus, it is imperative that a harmonous business environment is fostered to ensure continued growth of the sector. The timely and equitable resolution of disputes within this critical sector is not just essential but paramount. The ADRC is committed to delivering an innovative, efficient, and cost-effective approach to dispute resolution, designed to reinforce industry stability and catalyze sustainable growth.”

He noted that the development of the ADRC Draft Rules of Procedure was not merely an administrative task but a collective endeavor that requires the active participation of all relevant stakeholders.

“The draft rules we present today are the result of extensive research, and have been benchmarked against international best practices, while taking into careful consideration the industry within which we operate. We are however not ignorant of the value your insights will provide to ensure the practical effectiveness of these rules,” Komolafe said.

The NUPRC boss said the feedback of the stakeholders on the procedural fairness, accessibility, and comprehensiveness of the draft rules would be crucial in refining them to better serve the needs of all stakeholders and the industry at large.

He assured stakeholders that the commission is fully committed to ensuring that the ADRC becomes a beacon of excellence in dispute resolution.

“We aim to establish procedures that are not only legally sound but also user-friendly and capable of delivering timely and just outcomes for all parties.

“Looking ahead, we are confident that the ADRC will become a dynamic institution that evolves with changing needs and challenges. The success of this vision depends largely on the strength of the partnership between the Commission and its stakeholders. Together, we can build a dispute resolution system that is both robust and resilient,” Komolafe added.

Addressing journalists, the Commission Secretary and Legal Adviser, Olayemi Anyanechi, said since the establishment of ADRC, NUPRC has been working assiduously to make it a pride of Nigeria and the African continent.

“We hope that when that document is finished, we can have a document that can naturally mediate and settle dispute in the Nigerian upstream oil and gas sector,” she said.

Highlighting the significance of adopting ADR in mediation and settlement of dispute in the upstream sector of the industry, Anyanechi stated that it is not just about cost, but also about efficiency and conviviality.

“The commission this year alone (have) received about 70 cases. And we spend so much money – Federal Government money – defending matters. So, for us, it’s important to be able to oversee the industry, to regulate the industry in a more convivial environment,” Anyanechi said.

With the centre currently in Lagos and Bayelsa states, she informed that the commission is focused on setting up ADR centres in oil and gas producing communities, adding that that is where NUPRC gets bulk of disputes that it needs to resolve.

Under the draft Rules of Procedure, which is still under review, the centre has jurisdiction to consider disputes between interest holders in a license or lease; disputes between a licensee or lessee and any subcontractor related to the license or lease; disputes between licensees and lessees concerning industrial and employee relations; and disputes between the Settlor and the Board of Trustees of a host community trust fund.

Others include disputes arising between Settlor and Board of Trustees, Settlor and a host community; host community disputes related to upstream petroleum activities; disputes emanating from oil field service contracts; and disputes arising from or relating to the commercial and technical aspects of oil and gas operations involving operators, non-operators, joint ventures, and contractors.

However, the centre cannot engage in disputes involving the NUPRC and the Ministry of Petroleum Resources.