…Validates NUPRC’s Crude Oil Cargo Declaration Contract With P-Lyne Energy Limited
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has faulted the contract awarded by the Nigerian Shippers’ Council to Antaser Nigeria Limited to implement an International Cargo Tracking Scheme which also includes crude oil exports.
The position of the minister is coming following contentions between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Shippers’ Council over which agency has the statutory powers to implement a Cargo Tracking Scheme for Nigeria’s upstream petroleum industry.
The NUPRC had awarded a contract to P-Lyne Energy Limited for the provision of pre-field development studies for advanced crude oil cargo declaration.
But Antaser is claiming that the contract awarded to P-Lyne is a duplication of the crude-oil-export tracking component of the contract awarded to Antaser and is challenging the award of the crude oil advance cargo monitoring contract to P-Lyne by the Commission.
But addressing the issue in a document seen by THE WHISTLER, Lokpobiri pointed out that the powers of a government agency to perform an act is conferred by its enabling law, and a statutory body cannot act outside the scope of its powers as set out by its enabling law.
Specifically, the minister noted that where an agency’s action goes beyond or outside the power granted by the enabling law, its acts or decision will be declared ultra vires, adding that an ultra vires act does not have any binding effect in the eyes of the law.
While reeling out the powers of the NUPRC under Section 6,7 and 10 of the Petroleum Industry Act, he explained that the PIA made it manifestly clear in several of its provisions that the NUPRC is to enforce, administer and implement laws, regulations and policies over any matter concerning upstream petroleum operations, including those provided under laws or enactments in force prior to the coming into force of the PIA.
On the other hand, he noted that the Nigerian Shippers’ Council has no capacity or power to enforce, administer and implement laws, regulations and policies over any matter concerning upstream petroleum operations, or to enter into contracts granting any entity such rights.
He said, “Even if the NSC Act had made any provisions concerning petroleum matters, the provisions of the PIA, being a specific law regulating the petroleum sector will prevail over the provisions of the NSC Act.
“In this particular case, however, no powers to regulate the petroleum sector was conferred on the NSC under its enabling Act.
While it is not the intention of this brief to address the powers or the authority of the Nigerian Shippers’ Council to contract with Antaser to implement the International Cargo Tracking Scheme or any of its components, it is manifestly clear that there is nothing in the NSC Act which confers power or authority on the NSC to oversee any aspect of the Nigerian petroleum sector whether upstream, midstream or downstream or to implement government policies in regard thereto.
“Section 3(f) of the NSC Act (which is the sub-section that confers contractual capabilities on the NSC on shipping matters) appears to be limited to matters affecting the interests of shippers.
“There is no scenario where the monitoring and tracking of crude oil exports can be said to be a matter affecting the interest of shippers.
“As it is a fundamental principle of law that a statutory body cannot act outside the scope of its powers as set out by its enabling law, any act by the NSC in relation to the administration or implementation of any policy of government or contract in relation to the petroleum sector is ultra vires the NSC and is void ab initio, regardless of when it was entered into.”
He explained further in the document that a contract would be unenforceable if the parties did not have the capacity to enter into it adding that, “Any contract between Antaser and the NSC on any matter outside the scope of the NSC’s powers or objects is void ab initio and Antaser will not be able to rely on it.”
The minister called on Antaser to thoroughly review the provisions of the NSC Act for proper guidance on what the NSC may contract in respect of its powers.
Lokpobiri said, “To be clear, any government initiative or policy targeted at curbing crude oil theft, determining the exact volume of crude oil losses through terminals, recommending practical solutions to reduce future crude oil losses and collating actual losses by operator, by trunk line, by terminal and providing various analytical data (which is the essence of Advance Cargo Declaration Contract awarded to P-Lyne) can only be legally validly administered by the NUPRC and not the Nigerian Shippers council, or indeed any other agency.
“The Nigerian courts have consistently espoused the ultra vires doctrine and its impact on the validity of the acts of an administrative body. A case in point would be the case of National Oil Spill Detection And Response Agency (NOSDRA) v. Mobil Producing Nigeria Unlimited (Exxonmobil), where the court held that the imposition of a fine on ExxonMobil by NOSDRA in respect for an oil spill was contrary to its powers.
“The Advance Cargo Declaration Contract awarded to P-Lyne is an initiative of the Commission to properly and effectively fulfil its responsibility of hydrocarbon accounting and the establishment of an effective and efficient process that addresses the challenges of illegal exports of crude oil, crude oil theft and other criminal activities currently plaguing the upstream petroleum industry, and such can only be administered by the NUPRC, being the sole agency vested with the oversight of the upstream sector, and implementation of any government policies relating thereto.”
‘You Lack Powers To Implement Laws On Upstream Operations’ – Minister Faults Shippers’ Council Cargo Declaration Contract is first published on The Whistler Newspaper
