The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has refuted the ‘failure to enforce the domestic crude supply obligation’ claims made by Dangote Refinery, stating that it facilitated the supply of over 29 million barrels of crude oil to the company from January to June 2024.
The Commission in a statement signed by its management of Friday explained that as part of its commitment to ensure the enforcement of section 109 of the Petroleum Industry Act, 2021 which provides among others, the domestic supply of crude to local refineries on a ‘willing buyer, willing seller’ basis, has ensured that Nine refineries are supplied crude despite low crude oil production.
This follows the claims by Anthony Chiejina, the Dangote Group’s Chief Branding and Communications Officer, that the refinery’s primary issue lies with the NUPRC for its alleged failure to enforce the domestic crude supply obligation.
Chiejina had said that while NNPC has supplied a portion of the required crude, the volume falls significantly short of the refinery’s needs, stating that the refinery have been unable to secure the remaining portion from both NNPC and International Oil Companies (IOCs).
However, the Commission said, t’s strategic commitments to Nigeria’s energy security have led to the facilitation of the supply of 32 million barrels of crude to Dangote Refinery and other local producers in the first half of 2024.
It said, “The NUPRC in its effort to enforce section 109 of the PIA, 2021 has eveloped and gazette Regulation of the Production Curtailment and Domestic Crude Oil Supply Obligation (DSO) Regulation 2023. The NUPRC took an additional step to ensure that crude producers furnish the Commission with copies of all crude oil sales and purchase agreements entered or any security interest entered, that is tied to crude oil production.
“The commission on several occasions has also engaged Dangote and local refiners to ensure their supply quota is met in line with the provisions of the PIA. For effective implementation of the DCSO, the NUPRC established a working committee comprising of NUPRC, Oil Producers Trade Section (OPTS), the Independent Petroleum Producers Group (IPPG), Crude Oil Refinery-Owners Association of Nigeria (CORAN) and NUIMS.
The NUPRC has facilitated domestic supply of crude oil to Dangote Refinery and other Refiners using the monthly Production curtailment platform. These strategic commitments to Nigeria’s energy security have led to the facilitation of the supply of 32 million barrels of crude to Dangote Refinery and other local producers in the first half of 2024.
“A breakdown shows that nine refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone enjoyed 29,047,098 barrels out of the total supply between January to June 2024.”
According to the Commission, Warri Refinery received 949,670 barrels; NDPR-NDPR Refinery got 823,395 barrels of crude; the Port Harcourt Refinery received 471,123 barrels; Seplat-WPSOL Refinery was allocated 419,541 barrels while Waltersmith-WSPOL Refinery got 296,353 barrels.
Other beneficiaries were Edo Refinery which got 58,504 barrels of crude and Du-port Refinery which supplied 22,438 barrels of crude.
It stated that in the pursuit of its mandate, if it becomes necessary for licenses to be withdrawn, the commission will do so but it will not resort to the ‘presumptuous and arbitrary’ withdrawal of licenses because of the ‘Sanctity of Contract.’
“However, the regulator as a subject matter expert is of the opinion that arbitrary revocation of licenses is not in the best interest of the country particularly in the era of low investment arising from the onslaught in energy transition,” it added.
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