The Federal Government (FG), through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has expressed worries over oil companies’ non- compliance to the Domestic Crude Oil Supply Obligations (DCSO).
It said the provisions of Section 109 of the Petroleum Industry Act (PIA) 2021, mandates the allocation of a portion of crude oil produced by Oil companies to Domestic Refineries in operations.
The Commission’s Chief Executive, Engr. Gbenga Komolafe made the disclosure at a stakeholders engagement on the implementation of domestic crude oil supply obligation under section 109(2) of the PIA in Abuja on Tuesday.
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Already, he said the complaints received so far from within the Commission, oil producers and Dangote refinery, are the 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,” he said.
He also identified change in vessel nomination under 24 hours to laycan, inability to provide the required financial instrument / backing prior to loading among others as major complaints.
Similarly, he mentioned that delay in expected time of arrival of vessels resulting in production cut is inimical to the country’s budgetary targets as well as frequent change in laycans for crude oil allocated to domestic refineries.
However, he said 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.
He noted that the DCSO will foster the growth
and sustainability of domestic refining capacity,
“which is crucial for enhancing energy security,
promoting local value addition, and driving economic development in our country.
“It is essential to acknowledge that the successful implementation of the DCSO requires careful coordination, collaboration, and proactive problem-solving among all stakeholders involved.”
TheWitness
