The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern warning to oil production companies, asking them to strictly adhere to crude oil supply obligations to local refineries.
Mr. Gbenga Komolafe, the commission’s Chief Executive Officer, said in a statement on Monday that failure to comply would result in the denial of export permits for crude oil cargoes intended for domestic refining.
Komolafe’s warning follows a recent meeting where refiners and producers traded blame for inconsistencies in the implementation of the Domestic Crude Supply Obligation (DCSO) policy.
However, both parties acknowledged that the regulator has put in place effective measures for implementation.
Komolafe said refiners must adhere to international best practices in procurement and operational matters and reminded producers not to unilaterally alter the conditions stated in the DCSO policy.
The NUPRC CEO cited Section 109 of the Petroleum Industry Act 2021, emphasizing that the commission will strictly enforce the policy and penalize defaulters.
Komolafe cautioned that “the diversion of crude cargo designated for domestic refineries is a contravention of the law” and has implications for the country’s energy security.
To ensure compliance, the NUPRC has taken significant regulatory actions, including the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023.
The commission also monitors compliance with production metrics during monthly meetings with upstream operators.
Komolafe emphasized:”These actions are necessary to ensure that the DCSO policy is implemented effectively and that the country’s energy security is protected.”
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