NMDPRA, NUPRC’s Fight for Control Persists as Authority Accuses ExxonMobil of Illegal Lifting of Butane at Offshore Terminal

*IOC debunks allegation, says fight between two agencies messing up Nigeria’s image before investors

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has alleged that ExxonMobil Corp was involved in the illegal lifting of petroleum products from an offshore terminal.
This, however, showed the continued overlap and power tussle between the NMDPRA and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), two main regulatory agencies in the petroleum sector.

However, ExxomMobil has debunked the allegations, saying its operations were carried out in full compliance with the law.
The American oil major also said what was playing out was just the ongoing fight between the NMDPRA and the NUPRC over who controls the export terminals, adding that the fight between the two agencies was messing up Nigeria’s image before investors and causing operators suffering.
According to a letter of complaint to the Ministry of Petroleum dated June 8, which was seen by Reuters, NMDPRA said that Barumk Gas, a shipping vessel, was lifting butane from the ExxonMobil-controlled Bonny River Terminal without its “authorisation or participation.”

By law, the regulator designated for upstream is the only one allowed to have a key to the oil valve and companies need to be accompanied by a member of the regulatory staff to tap the oil.
“The actions of ExxonMobil and Barumk Gas constitute economic sabotage, criminal damage and theft of Nigeria’s national resources,” NMDPRA Chief Executive Officer, Farouk Ahmed said in the letter dated June 8, according to Reuters.

Ahmed said Barumk Gas should be stopped from sailing out until an investigation was conducted.
Refinitiv data, according to the report, showed Barumk Gas was fully loaded at the Bonny Terminal.
However, reacting to the allegation, a Corporate Communications staff at ExxonMobil Nigeria, Mr. Oge Udeagha, told THISDAY in a terse text message, yesterday, that, “All operations of the NNPC/MPN Joint Venture are carried out in full compliance with the law.”
But another official of the company, who pleaded for anonymity in this report, said what was playing out was just the ongoing fight between the NMDPRA and the NUPRC over who controls the export terminals.

The official added that the fight between the two agencies was messing up Nigeria’s image before investors and causing operators suffering.
“The way I see it, this is a fight between NUPRC and NMDPRA that are fighting over who controls export and all that. So, we the operators are the ones suffering it. This fight has been going on for some time now and I think it got to the Senate and there was a Senate resolution on that.
“Then, the former president issued a directive on May 3, clarifying that NUPRC is the sole regulator responsible for supervising all exports. I’m sure you saw that letter. So, we don’t know where this one is coming from”, the source told THISDAY.”  

The official explained that the company applied to NUPRC for an approval to integrate their operations at the terminal, which he said was a normal thing as  provided for in the law for a company to integrate its operations to enable it have one operation.
 The source further explained, “And we got the approval duly approved. In fact, this export they are talking about, an official of the NUPRC was there and supervising. So, if there is any lock that was changed or whatever that was done, it must be by the NUPRC, not us. We don’t have a key to the valves. So, they just don’t want to say what they have in mind. The two agencies are still fighting.

“And for me, the big issue here is that we are messing up the image of this country from an investment perspective with some of these things the regulators are doing. So, you don’t even know who is in charge and who is not.
“The president gave a directive and someone somewhere is making trouble and calling an international oil company names, making allegations that are unfounded just because you and your sister agency are fighting.

“And these are the same people you people are calling to come and invest. Invest how? When you are trying to mess up my image. You are trying to stop my operations and you are asking me to bring more money to invest. We are getting tired of some of these things.”
The ExxonMobil source advised the agencies to get their ass together to avoid destroying this country.

According to the official, “the misalignment is well too much and they are taking this thing too far. The thing is there, it’s in the law. There is an approval for us to integrate, there was a Senate resolution and there was a directive from the president saying NUPRC is in charge of all the exports, and there was an NUPRC person at the place supervising what was going on.
“So, where is this all coming from? Just because NMDPRA does not recognize NUPRC as the regulator who should be doing this. That’s all, and they are now calling us names”.

All attempts to get the response of the NMDPRA on the report proved abortive as the agency’s spokesman, Mr. Kimchi Apolos proved abortive.
Also, NUPRC declined to respond.
THISDAY had reported that in an attempt to resolve the overlap between NMDPRA and NUPRC in regulating the upstream, midstream and downstream oil and gas sectors, the immediate-past President Muhammadu Buhari, had on May 3, directed the NUPRC to take over the supervision of all crude oil export terminals in the country.

The presidential directive was contained in a letter, dated May 3, 2023, with reference number SH/COS/24/A/78, sent to Gbenga Komolafe, Chief Executive Officer of NUPRC, and Farouk Ahmed, Chief Executive Officer of NMDPRA.
That followed the outcry by the International oil companies (IOCs) and the Nigerian independent operators about the worrisome overlap of regulatory activities between the two agencies.

The stakeholders had during the CEOs Roundtable at the 2023 Nigeria International Energy Summit (NIES) in Abuja, lamented the costs and dangers the regulatory misalignment was having on their operations and called for immediate resolution.
However, in the official communication, Buhari had instructed the NMDPRA to cease all actions related to monitoring activities at Nigerian crude oil export terminals.