• Friday, February 07, 2025
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NUPRC to halt export permit for crude oil cargoes intended for domestic refineries

Nigeria risks declining earnings from crude oil

crude oil

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned that it will henceforth deny export permits for crude oil cargoes intended for domestic refining, if oil companies fail to fulfil their domestic crude obligations.

Gbenga Komolafe, the Commission Chief Executive disclosed this in a statement issued to journalists on Monday, insisting that any changes to cargoes designated for domestic refining must receive express approval from the commission.

Read also: NSCDC arrests four suspects for vandalism, crude oil theft in Abia State

In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, Komolafe reiterated that diverting crude oil meant for local refineries violates the law. The Commission noted that both the refiners and producers have continued to blame each other for the inconsistencies in the implementation of the Domestic Crude Supply Obligation (DCSO) policy.

”While the refiners claimed that producers were not meeting supply terms and preferred to sell their crude outside, forcing them to look elsewhere for feedstock, the producers countered that refiners hardly met commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks,” he said.

The regulator cautioned against any further breaches from either party, stressing on the need for refiners to adhere to international best practices in procurement and operational matters. It stressed that producers must not vary the conditions stated in the DCSO policy without obtaining express permission from the CCE before selling crude outside the agreed framework. This is to avoid abuse.

Read also: NNPC clarifies crude oil production discrepancy claims

Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure a stable supply of crude oil to domestic refineries and strengthen the nation’s energy security, and stated that NUPRC will henceforth strictly enforce the policy regarding implementation and defaults by oil companies.

He stated that significant regulatory actions have already been taken by the Commission, in line with the enabling laws, to enforce compliance with the Domestic Crude Supply Obligation (DCSO). These actions include the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the creation of the DCSO framework and procedure guide for implementation.

The CCE stressed that it will no longer tolerate violations of the laws governing domestic crude supplies to local refineries, as such actions have implications for the country’s energy security. “Kindly note that the diversion of crude cargo designated for domestic refineries is a contravention of the law and the Commission will henceforth disallow export permits for designated crude cargos for domestic refining,” he added.

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