Oil & Gas
THE Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and major oil stakeholders are fine-tuning operational issues related to domestic crude supply obligations between producers and refiners.
Speaking at the stakeholders’ meeting on Thursday in Abuja, Mr Gbenga Komolafe, Commission Chief Executive, NUPRC, said it was focused on fostering growth within the sector.
Komolafe said the NUPRC would avoid arbitrary actions that could dissuade operators or hinder investments.
The meeting presented a platform for the NUPRC, Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG) members to collaborate on ensuring that the upstream sector operates effectively within the established laws.
At the meeting, the OPTS and IPPG sought clarifications on certain operational challenges regarding pre-allocation of crude oil to domestic refiners, pre-existing contracts amid domestic crude supply obligations and pricing issues.
Komolafe reassured the stakeholders that the commission had remained committed to regulating the industry as mandated by law.
He recalled that in January, the commission had outlined a five-point agenda that would aid increased oil production in 2025.
These, he said, included effectively implementing initiatives to boost production by one million barrels, enhancing the transparency and accuracy of hydrocarbon measurement through metering and cargo regulations and digitalising upstream regulatory activities for better compliance.
He listed others as optimising unit costs per barrel to increase revenue and conducting licensing bid rounds to revitalise non-performing assets in line with the provisions of the Petroleum Industry Act 2021.
He revealed that the commission had developed a template to identify the needs of every participant within the value chain.
“This template aims to address gaps by leveraging the capabilities of different players, thus fostering collaboration, networking and operational optimisation.
“To ensure consistent supply of crude oil to domestic refiners, the commission early this month announced that significant regulatory actions to enforce compliance with the Domestic Crude Supply Obligation (DCSO) have been put in place.
“Including the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023 along with the implementation of a DCSO framework and procedure guide,” he said.
He said the Commission had emphasised that it would strictly enforce policies regarding implementation and defaults by oil companies and would not hesitate to deny export permits for crude oil intended for domestic refining if companies fail to meet their obligations.
Komolafe clarified that the reference to export permit denial was not a threat to legitimate industry players, but directed at non-compliant operators who may seek shortcuts, and in breach of the law.
He said the government was committed to protecting the interests of investors but would not compromise on issues that could jeopardise energy security or undermine national interests.
He reiterated the government’s stance on not interfering with product pricing, as long as prices remain reasonable and fair.
He expressed commitment to the willing-seller, willing-buyer option which aligns with international best practices and affirmed that government would support the upstream sector’s optimal functioning without resorting to price-fixing. (NAN)
A.I
Feb. 20, 2025
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