NUPRC introduces new template for domestic crude oil supply

Onwubuke Melvin
Onwubuke Melvin

The Nigerian Upstream Petroleum Regulatory Commission has introduced a new template for the supply of crude oil in Nigeria. The initiative is to enhance the activities of local refineries as well as ensure the availability of petroleum products.

This was disclosed by NUPRC Chief Executive Officer, Gbenga Komolafe in his address to the Press on Monday, according to Businessday.

Komolafe stated that the move was in alignment with Nigeria’s commitment to boost the refining capacity of indigenous producers and ensure the sustainability of its oil industry.

According to him, Nigeria’s crude and condensate reserves stood at 31.06 billion barrels and 5.94 billion barrels respectively as of 1 January 2024, which accounted for a total of 37.50 billion barrels.

Meanwhile, the total gas reserves of Associated Gas and Non Associated Gas were 102.59 trillion cubic feet and 106.67 trillion cubic feet respectively, resulting in a total gas reserve of 209.26 trillion cubic feet.

He said, “The Reserves Life Index is 68.01 years and 97.99 years for oil and gas respectively, positive gross addition to oil and gas reserves of 1.087 billion barrels and 2.573 trillion cubic feet respectively were recorded.”

He underlined that in compliance with the provisions of Section 109(2) of the Petroleum Industry Act (PIA), 2021, the commission has initiated a template to drive the activities for domestic crude oil supply obligation.

The provision of crude oil requirements to the Commission by refineries in operation shall be included in the procedures for the implementation of the domestic crude oil supply obligations, as set out in the template, and shall be reported accordingly where there are shortages or insufficient supply conditions.

H said “Where a refinery is not successful at independently sourcing crude oil supply from lessees based on available information, the refinery’s crude preferences should be sent to the commission before the 15th business day of the third month.

“All DCSO allocated cargoes must be discharged into the refinery facility they are programmed for and shall not be diverted or swapped; utilisation of any DCSO allocation by any refiner for any purpose other than domestic processing, without written approval by the commission shall attract suspension from DCSO allocation for a period determined by the commission in addition to any other administrative penalty that may be imposed by the commission.

“In the occurrence of a default in payment by the refiner, the commission shall not allocate DCSO to the defaulter for a period to be determined by the commission in addition to the penalty contained in the sales agreement between the refiner and the lessee.

“In the event of failure to lift within the scheduled laycan (or delivery window) by the refiner, resulting in a tank top/production curtailment, the defaulting refiner shall be suspended by the commission from receiving DCSO allocation for a period to be determined by the commission; and will be liable to pay a fine equivalent to the delayed royalty from the deferred volume in addition to other failures, to lift penalties.”





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