The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has threatened to descend on crude oil producers in Nigeria who fail to supply crude to local refineries as provided for by the Petroleum Industry Act (PIA).
It said it would deny export permits for crude oil cargoes intended for domestic refining, if oil companies do not fulfill their domestic crude obligations.
According to a statement issued in Abuja, NUPRC’s chief executive, Mr Gbenga Komolafe, said in a letter dated February 2, 2025 and addressed to exploration and production companies and their equity partners, that diverting crude oil meant for local refineries violates the law and would be met with sanctions.
The statement further revealed that the NUPRC also convened a meeting attended by more than 50 critical industry players to sort out any differences hindering the supply of feedstock to Nigerian refineries.
The statement disclosed that at the meeting, both the refiners and producers blamed each other for the inconsistencies in the implementation of the domestic crude supply obligation policy, even though they agreed that the regulator had put in place appropriate measures for effective implementation.
“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.
“The regulator cautioned against any further breaches from either party. It advised refiners to adhere to international best practices in procurement and operational matters and reminded producers not to vary the conditions stated in the DCSO policy without obtaining express permission from the chief executive before selling crude outside the agreed framework. This is to avoid abuse,” the NUPRC pointed out.
Komolafe referenced Section 109 of the PIA, 2021, which aims to ensure a stable supply of crude oil to domestic refineries and strengthen the nation’s energy security.
He stated that NUPRC would henceforth strictly enforce the policy regarding implementation and defaults by oil companies, adding that significant regulatory actions had already been taken by the commission, in line with the enabling laws, to enforce compliance with the DCSO.
These actions, Komolafe reiterated, included 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.
He said NUPRC would strictly enforce the policy regarding implementation and defaults by oil companies.
