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Buhari directs MDAs to comply with senate resolution on crude oil export terminals regulation

Why I am grateful to PMB

President Muhammadu Buhari, has instructed all government establishments to comply with the senate resolution asking that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) be the sole and only regulatory entity to regulate and monitor the activities of all existing crude oil export terminals in Nigeria.

The resolution was passed November 2022 in alignment with Section 7ee of the Petroleum Industry Act (PIA) 2021.

Institutions affected by the directive include the NUPRC, Nigerian Midstream Downstream Regulatory Authority (NMDPRA), the Nigerian National Petroleum Company Limited (NNPCL), Federal Ministry of Industry, Trade and Investment (FMITI), other industry players and relevant Ministries, Departments and Agencies (MDAs).

Ibrahim Gambari, chief of staff to the president stated and signed this in a memorandum dated May 3, 2023, directed to the Minister of State, Ministry of Petroleum Resources; Commission Chief Executive of NUPRC; and the Authority Chief Executive of NMDPRA.

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It was also directed that the exercise of any regulatory role by the NMDPRA on any existing crude oil export terminal established prior to the effective date of the PIA 2021 should cease immediately.

The memo titled Regulatory Oversight of Crude Oil Terminals with reference number SH/COS/24/A/78 further directed the Minister of State for Petroleum Resources to ensure immediate compliance; and report back within fourteen days confirming compliance with the resolution by NUPRC, NMDPRA, NNPCL, FMITI, industry players and relevant MDAs, as stated in the first directive in the correspondence from the Presidency.

Other MDAs copied in this correspondence include the Secretary to the Government of the Federation, Minister of Trade, Industry and Investment, Minister of Transportation, Director General of Directorate of State Security, National Security Adviser, Group Chief Executive of NNPCL, Chairman of the Oil Producers Trade Section, President of Lagos Chamber of Commerce, Industry, manufacturing and Agriculture, Chairman of Independent Petroleum Producers Group and the Office of the Commander-in-Chief.

According to a statement issued by the NUPRC, the Senate Ad Hoc Committee on the Investigation of oil lifting, theft and impact on petroleum production and oil revenues, in its report released November, 2022, had observed that some agencies were still engaging in activities at the export terminals in contravention of the extant provisions of the PIA, particularly sections 7(ee), 8(d), 32(ii) and 174(a).

“Such engagements, it noted, followed administrative directives from the Ministry of Petroleum Resources. It recommended that such directives be jettisoned as the law (PIA) takes precedence over administrative directives that are inconsistent with its provisions,” it stated.

The report recommended that NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria including integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.

Among other 24 recommendations, the report also recommended that there should be an immediate streamlining of the agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions, while NUPRC should strengthen and deploy all necessary procedures to firm up its oversight functions, including digital accounting mechanisms at all crude oil terminals for transparent hydrocarbon accounting.
“It specifically recommended that as intended in the PIA, the NMDPRA statutorily should concentrate fully on regulating the midstream and downstream activities i.e. from refineries, mid and downstream gas infrastructure, supply, storage and distribution of refined petroleum products, petrochemicals, virtual pipelines and retailing facilities, in line with the provisions of the PIA, including future stand-alone crude oil and natural gas export terminals,” it added.

The NUPRC noted that , in spite of the endorsement of the Senate recommendations by the Presidency, the aspect of regulation and monitoring of activities at crude oil export terminals has not been given the required effect, therefore necessitating the recent express directives from the Presidency, on the matter.