CONTRIBUTOR: IFEDIORA OBIORA CHISOM

Introduction

In Nigeria’s vibrant oil and gas sector, disputes between producers and host communities have long been marked by protracted court battles, escalating costs, and fractured relationships.^[1] These prolonged litigations do not only drain financial and judicial resources but also impede oil production and tarnish investor confidence. Understanding the importance for a more efficient and cooperative mechanism, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) established the Alternative Dispute Resolution Centre (ADRC).^[2] With a mission grounded in fairness, efficiency, and integrity, the ADRC offers mediation, conciliation, and other ADR strategies that empower parties to resolve conflicts swiftly and amicably, restoring balance and propelling industry stability.^[3]

Launched through strategic inaugurations in Bayelsa,^[4] and structured with an Advisory Council and a knowledgeable Body of Neutrals,^[5] the Centre stands as a proactive alternative to the burdens of traditional litigation. This article delves into its purpose, objectives and structure and the broader benefits for Nigeria’s upstream sector. Ultimately, it examines how the NUPRC ADR Centre is not just a reformative tool but a beacon of transformation, offering hope for more harmonious and productive industry relations.

Purpose, Objectives and Structure of the Centre

When the NUPRC announced plans to open Alternative Dispute Resolution Centres (ADRCs) across oil-producing regions in Nigeria, it was not just another bureaucratic move; rather it was a purposeful shift toward tackling conflict in the oil and gas industry in a more efficiently.

At a stakeholder consultation in Lagos, the Chief Executive Officer (CEO) of NUPRC, Engr. Gbenga Komolafe, emphasized that these regional ADRCs are not simply about cutting court backlogs or saving costs.^[6] Instead, they are built on the idea of fairness, transparency, and responsiveness, which are designed to bring disputes into the open and settle them quickly and fairly. He pointed out that the goal is to make dispute resolution more collaborative, practical, and accessible, thereby reflecting the real needs of both companies and communities.^[7]

Notably, the ADRC is guided by an Advisory Council (led by the CEO of the NUPRC) and managed by a Body of Neutrals comprising legal and industry experts.^[8]

Power to Establish the ADRC

While the Petroleum Industry Act (PIA) of 2021 contains no express provision conferring authority on the Minister of Petroleum Resources or the NUPRC to establish dispute resolution centres, the repealed Petroleum Act (PA) of 2004 furnished a statutory foundation for the resolution of disputes through alternative dispute resolution mechanisms.

It was expressly provided by the PA of 2004 that where by any provision of the Act or any regulations made thereunder a question or dispute is to be settled by arbitration, the question or dispute shall be settled in accordance with the law relating to arbitration in the appropriate State and the provision shall be treated as a submission to arbitration for the purposes of that law.^[9] Pointedly, the term “appropriate State”, as referred to in the provision means the State agreed by all parties to a question or dispute to be appropriate in the circumstances or, if there is no such agreement, the Federal Capital Territory, Abuja.^[10] In other words, it means the State that all parties to the dispute mutually agree is suitable for resolving the matter and where the parties do not reach such an agreement, the default location shall be the Federal Capital Territory, Abuja.

In view of the foregoing, although the PIA 2021 did not make a similar provision, it made a saving provision which by extension implies that the provision of section 11 of the PA 2004 is still in force. For the purposes of clarity, the PIA 2021 provides that any Act, subsidiary legislation or regulation, guideline, directive and order made under any principal legislation repealed or amended by the Act shall, in so far as it is not inconsistent with the Act, continue in force mutatis mutandis as if they had been issued by the Commission or Authority under this Act until revoked or replaced by an amendment to this Act or by subsidiary legislation made under this Act and shall be deemed for all purposes to have been made under this Act.^[11] Thus, this saves the provision of section 11 of the PA 2004.

By incorporating the ADRC within the framework of the National Oil and Gas Excellence Centre (NOGEC), the Nigerian government is exercising its mandate to oversee, formulate, and implement policies governing the petroleum industry, thereby establishing a strategic mechanism for resolving disputes that could otherwise impede projects and deter investments.^[12] It is noteworthy that the NOGEC is a center which was established under the Department of Petroleum Resources in 2021 to ensure transparency in the Nigerian oil and gas sector, and expected to serve as an integrated resource complex to drive safety, value and cost efficiency in the industry, as well as strengthen Nigeria’s position as regional leader in the oil and gas industry.^[13]

The ADRC streamlines regulatory oversight by creating a centralized platform for monitoring and analyzing dispute outcomes.^[14] Such centralization facilitates the enforcement of regulatory compliance and promotes uniform application of policies throughout the sector. Furthermore, the ADRCs will engage mediators and arbitrators with specialized expertise in the oil and gas industry, ensuring that disputes are adjudicated by professionals with a thorough understanding of the sector’s technical, commercial, and regulatory intricacies. In addition, the inherent flexibility of ADRCs will enable the development of procedures specifically tailored to the oil and gas industry’s requirements, including the capacity to establish timelines and deliver well-informed and timely resolutions.

What are the Benefits of the NUPRC ADRC?

1. Expert-Led Resolutions: One of the most significant advantages is that disputes are handled by a Body of Neutrals composed of professionals with deep legal and industry knowledge like seasoned attorneys and oil & gas experts. Their understanding of the technicalities involved in oil disputes brings practical solutions rooted in real life context. This is more effective than relying solely on generalist judges who may be unfamiliar with the complications in the oil and gas industry.
2. Faster and More Cost-Effective Resolutions: The ADRC process cuts through lengthy court procedures. Thus, instead of waiting years for litigation to conclude, parties can resolve their issues swiftly and with less legal cost. This is very important in the industry because time equates to money and spending a huge amount of time in litigation means incurring more financial losses.
3. Fosters Collaborative Resolution: Notably, litigation tends to strain the relationships between disputing parties, especially between companies and host communities. However, with the presence of ADRC’s less formal and more collaborative approach, mutual understanding could be encouraged between disputing parties and thus, relationships can be preserved, paving the way for future cooperation.
4. Promotes Investor Confidence and Industry Stability: When disputes are handled efficiently, confidence grows in the sector. Thus, this can attract more investors who would invest, knowing that conflicts may not be subject to prolonged court battles. This can also lead to stability in the economy.

Conclusion

The NUPRC’s ADRC represents a turning point in Nigeria’s upstream oil and gas sector. By placing disputes in the hands of legal and industry specialists, the ADRC brings both practicality and insight to complex disagreements. It offers speedier, more affordable resolutions that ease the pressure on overloaded courts and accelerate the return to productive operations. It encourages collaboration and aids in mending the discord between oil companies and host communities. This collaborative spirit, supported by transparent, fair procedures designed with stakeholder input and global standards, strengthens investor confidence and promotes regulatory consistency.

REFERENCE

1. NUPRC, ‘NUPRC Inaugurates Centre for Efficient Dispute Resolution in Oil and Gas Industry’, < https://www.nuprc.gov.ng/nuprc-inaugurates-center-for-efficient-dispute-resolution-in-oil-and-gas-industry/> accessed 20^th August, 2025. ↑
2. Ibid. ↑
3. Ibid. ↑
4. Ese, S, ‘NUPRC Inaugurates First ADR Centre in Bayelsa’, <https://punchng.com/nuprc-inaugurates-first-adr-centre-in-bayelsa/> ↑
5. NUPRC, (n1). ↑
6. Akpan, U, ‘ADR will Enhance Growth in Oil, Gas Industry – NUPRC’, <https://www.vanguardngr.com/2024/08/adrll-enhance-growth-in-oil-gas-industry-nuprc/> accessed 20^th August, 2025. ↑
7. Ibid. ↑

8. SimmonsCooper Partners, ‘NUPRC Relaunches ADR Centre: Streamlining Dispute Resolution in Nigeria’s Oil & Gas Sector’, <https://resource.scp-law.com/wp-content/uploads/2024/09/SCP-Specialized-ADR-September.pdf> accessed 20^th August, 2024.

   ↑

9. PA 2004, s 11(1). ↑
10. Ibid, s 11(2). ↑
11. PIA 2021, s 311(1). ↑
12. Elias-Adebowale, F, et al, ‘NUPRC’s Alternative Dispute Resolution Centres and Implications for Dispute Resolution in Nigeria’s Oil and Gas Sector’, <https://uubo.org/wp-content/uploads/2024/10/NUPRCs-Alternative-Dispute-Resolution-Centres-and-their-Implications-for-Dispute-Resolution-in-Nigerias-Oil-and-Gas-Sector-03.10.2024.pdf> accessed 24^th August, 2025. ↑
13. ‘FG Inaugurates the National Oil and Gas Excellence Centre’ <https://proshare.co/articles/fg-inaugurates-the-national-oil-and-gas-excellence-centre?menu=Economy&classification=Read&category=Oil%20%26%20Gas> accessed 24^th August, 2025. ↑
14. Elias-Adebowale, F, et al, (n12). ↑