NUPRC Warns on Crude Oil Supplies to Nigerian Refineries

by Oluwatosin Racheal Alabi

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) cautioned companies supplying crude oil to private refineries. They must adhere to regulations or face serious repercussions for economic sabotage.

As more private refineries prepare to launch in Nigeria, the NUPRC stresses adherence to the Petroleum Industry Act (2021). This move ensures uninterrupted feedstock for operators.

The Commission’s [statement]( emphasized the negative global impact if Nigeria’s domestic refineries imported feedstock. Nigeria ranks among the top crude oil producers.

To counter potential sabotage, the PIA 2021 included the Domestic Crude Supply Obligation (DCSO). It guarantees a steady crude oil supply for domestic refineries.

The NUPRC has initiated measures like the Production Curtailment and DCSO Regulation 2023. This aligns with the PIA 2021’s Section 109(2). Actions include processing refinery feedstock approvals and seeking details on planned crude oil off-take from oil producers.

The Commission remains committed to shielding domestic refineries from undersupply. They’ll enforce penalties for non-compliance to the Act’s provisions.

The PC&DCSO Regulations outline stakeholder obligations. The Act mandates a “willing buyer and willing seller” supply model. In case of supply shortages, the Commission will issue Requests for Quotations to bridge the gaps.

Per its mandate in Section 109 (4) of the PIA, all 52 exploration and production firms are summoned for a meeting on November 1, 2023. They’ll discuss the domestic crude oil supply obligation and compliance.

As of October 27, 11 operators, including Dubri Oil Limited and Waltersmith Petroman Oil Limited, have replied. Responses from the remaining 42 are pending.

The NUPRC warns of severe penalties for defaults. Non-respondents to the Request for Quotation face a USD10,000 fine. Non-compliant companies could see export permits withheld and 50% penalties per barrel undelivered.

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