“‘No Export For Defaulting Oil Firms’ – NUPRC” — Moves Against Crude Diversion

To enforce compliance, the commission declared that it will deny export permits to any company failing to meet its Domestic Crude Supply Obligation (DCSO).

The warning was issued at a high-stake industry meeting last weekend, where over 50 key players, including IOCs, independent producers, and refiners, gathered to address concerns over the inconsistencies in DCSO implementation. The session saw a heated exchange, with refiners accusing producers of prioritizing exports over local supply, while producers argued that refiners often failed to meet commercial and operational terms, forcing them to seek alternative markets. Despite these disagreements, stakeholders acknowledged that NUPRC had put in place necessary frameworks to ensure effective policy implementation.

In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, NUPRC’s Commission Chief Executive (CCE), Gbenga Komolafe, reinforced the commission’s stance, warning that crude oil designated for domestic refining must not be diverted. “Any changes to cargoes designated for domestic refining must receive express approval from the Commission Chief Executive,” he stated, emphasizing the legal obligations of producers under the DCSO framework.

Citing Section 109 of the Petroleum Industry Act (PIA) 2021, Komolafe underscored that ensuring a stable crude supply to domestic refineries is crucial for Nigeria’s energy security. He reiterated that NUPRC will strictly enforce penalties, including disallowing export permits for companies that fail to meet their domestic supply obligations.

To strengthen compliance, the commission has already implemented regulatory measures, including the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, and established a DCSO framework and procedure guide. Additionally, during monthly compliance meetings with upstream operators, NUPRC monitors production metrics, ensuring crude availability is projected two months in advance to facilitate supply planning for refineries.

However, tensions over crude allocation persist. Last June, Edwin Devakumar, Vice President of Dangote Industries Limited, accused IOCs of deliberately inflating crude prices or claiming shortages, forcing the Dangote refinery to import crude at higher costs. He argued that multinational oil companies seek to keep Nigeria dependent on refined imports, enriching their home countries while undermining local refining capacity. “This exploitation strategy perpetuates unemployment and poverty in Nigeria and across Sub-Saharan Africa,” he said.

As NUPRC tightens enforcement, both refiners and producers have been urged to operate within the legal framework. Refiners are expected to uphold international best practices in procurement and operations, while producers must fulfill their domestic supply commitments without deviation.

The commission warned that further breaches will attract severe regulatory sanctions, as it moves to safeguard Nigeria’s refining sector and energy security.