NUPRC: Allegation of Non-delivery of Crude to Local Refiners Untrue, 3.6m Barrels Conveyed

Emmanuel Addeh in Abuja

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) last night refuted the accusation of its failure to enable the delivery of crude to domestic refiners, particularly modular refineries, noting that between September 2021 and May 2023, 3,614,936 barrels of crude were conveyed to three local facilities in the country.

The local refiners have for years complained that despite their willingness to pay for every barrel of oil supplied, they had not been getting feedstock for their facilities, a development that had negatively impacted their investments and stifled growth in the sector.

But in a statement issued in Abuja, the upstream regulator led by Gbenga Komolafe, indicated that only refineries that comply with the relevant requirements of Section 109 of the Petroleum Industry Act, 2021 were entitled to crude supply.

Between January 2019 and August 2021, the period before the PIA came into effect, it stated that over 1.7 million barrels of oil were supplied to two refineries that met the requirements of the law as at the time.

The two refineries, it added, are operated by Walter Smith and Niger Delta Petroleum Resources (NDPR), while the post-PIA supplies were made to Walter Smith, NDPR and OPAC refineries.

It stated that the Commission recently granted approval for Millennium Oil and Gas Limited to supply by trucking 60,000 barrels of crude oil at the rate of 20,000 barrels per month for three months to OPAC and Duport refineries in Edo State.

“In addition, alternate evacuation routes such as trucking of crude oil to refineries has been approved to forestall potential downtime during refinery operations which might arise due to non-availability or vandalism of pipelines,” it added.

The commission explained that it remains steadfast in delivering on the mandate stipulated by the PIA and will not relent in ensuring that a conducive and suitable supply of feedstock to all licensed refineries operating within the country is sustained.

It further stated that any refinery operator or group of refinery operators in Nigeria not receiving or claiming not to be receiving feedstock from appropriate agencies were yet to satisfy the mandatory requirements as stipulated by law.

It pointed out that the commission has provided regulatory support for qualified refineries by ensuring adequate crude oil supply, restating its commitment to transparency and determination to work within the provisions of the PIA.

“The commission has provided an enabling framework for the supply of crude oil to be negotiated between the lessee and the oil refining licensee, having regard to the prevailing international market price for similar grades of crude oil…

“The Ministry of Justice has gazetted the Domestic Crude Oil Supply Obligation Regulations developed by the commission, which provides the framework for placing crude oil supply obligations to operators of petroleum mining leases and Oil Mining Leases in Nigeria.

“Section 4(8) of the DCSO regulations states that: A lessee who has not complied with his DCSO where a willing buyer(s) exist shall not be granted an export permit for the export of crude from his lease area.

“This further reaffirms the commission’s drive to enforce DCSO to holders of oil leases within the country,” the NUPRC stated.

The commission also stated that following the directive by the president in May 2023, to resume full regulatory control of all terminals, it has been receiving and processing applications for barging and trucking permits.

It pointed out that the responsibility of periodically determining domestic crude oil demands lies expressly with the NMDPRA, stressing that such demands when they become available, are used to allocate supply obligation to lessees in line with the provisions of the relevant regulations