Following oil companies’ inability to meet the demand for crude oil by local refineries, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned that it will no longer issue export permits for crude oil cargoes meant for domestic refining. In a statement issued in Abuja, the Commission stated that if oil companies fail to meet their domestic crude obligations, exports will be banned.
The commission demanded that any adjustments to cargoes designated for domestic refining require express clearance from the Commission’s Chief Executive. The Commission stated: “In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe, reiterated that diverting crude oil intended for local refineries violates the law.”
“At a meeting last weekend attended by over 50 key industry participants, refiners and producers blamed one other for anomalies in the implementation of the Domestic Crude Supply Obligation (DCSO) legislation. They did, however, accept that the regulator had put in place necessary procedures to ensure effective implementation.
“While the refiners claimed that producers were not meeting supply terms and preferred to sell their crude outside, forcing them to look elsewhere for feedstock, the producers countered that refiners hardly met commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks” . The regulator warned against further breaches by any party and recommended refiners to follow international best practices in procurement and operations.
The Commission warned producers not to violate the conditions outlined in the DCSO policy without first receiving express permission from the CCE before selling crude outside of the agreed framework.
This is to prevent abuse. Engr. Komolafe referred to Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure a steady supply of crude oil to domestic refineries and strengthen the country’s energy security, and stated that the NUPRC will now strictly enforce the policy regarding oil company implementation and defaults.
He noted that the Commission has already taken major regulatory actions in accordance with the enabling laws to ensure compliance with the Domestic Crude Supply Obligation (DCSO). These efforts include developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as creating the DCSO framework and procedure guide for implementation.
