The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has raised concerns over the failure of Oil Producing companies to allocate a specified quantity of crude to local refining companies under the Domestic Crude Oil Supply Obligation (DCSO) framework.
The Commission Chief of NUPRC, Engr. Gbenga Komolafe who expressed concerns at the Stakeholders Engagement on the implementation of DCSO, lamented that the compliance gaps were adversely affecting the national budgetary targets.
He said: “The complaints received so far from within Commission, oil producers and Dangote refinery that are of concerns to the Commission include: Inability to factor in the provisions of the law while executing contractual agreements. This has resulted in some companies being reluctant to allocate a portion of their production to Domestic Refineries.
“Change in vessel nomination under 24 hours to laycan, Inability to provide the required financial instrument / backing prior to loading,.delay in expected time of arrival of vessels resulting in production cut which is inimical to our national budgetary targets,.frequent change in laycans for crude oil allocated to domestic refineries f.Delays at loading terminals after the arrival of the loading Vessel.”
Komolafe who disclosed that a committee has been constituted to look into the non- compliance issues with a view to proffering sustainable solutions, noted that the integrity of the DCSO was sacrosanct.
“Although a Committee has been set up with representatives from the Commission, NMDPRA, NNPCL, OPTS, IPPG and Dangote Petroleum Refinery, to come up with a framework that will ensure hitchfree implementation of the DCSO provisions, it is necessary for me to also have a discussion with the Chief.Executives since the bulk stops on your desk.
“I therefore welcome constructive dialogue to examine the causes of these issues and solutions on how to mitigate future re-occurrence with immediate effect.
“As a regulator, our priority is to uphold the integrity of the DCSO framework while fostering a conducive environment for the sustainable growth of Nigeria’s oil and gas industry. We remain dedicated to working closely with all stakeholders to overcome challenges, mitigate risks, and ensure compliance with statutory requirements,” he stated.
Speaking further, the NUPRC boss stressed the need to collaboratively carry out a comprehensive examination of the challenges and complaints raised by all stakeholders involved in the allocation and offtake process.
“Our aim is to identify and address these challenges effectively, with the ultimate goal of ensuring a seamless and efficient allocation process by the oil producers and offtake by the domestic refiners, in strict adherence to statutory requirements and operational best practices.
“While it is natural to encounter challenges, particularly during the initial stages of implementing Domestic Crude Oil Supply Obligation (DCSO), I want to assure you that the Commission is closely monitoring all developments to safeguard against any adverse impacts on national production and to prevent any violations of the DCSO provisions.”
