NUPRC to Deny Crude Oil Export Permits for Non-Compliance with Domestic Refining Obligations

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern warning to oil companies, stating that it will deny export permits for crude oil cargoes intended for domestic refining if they fail to meet their domestic crude supply obligations.

This announcement was made by Gbenga Komolafe, the Commission’s Chief Executive, in a statement released to journalists on Monday. Komolafe emphasised that any alterations to cargoes designated for domestic refining must receive explicit approval from the commission.

In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, Komolafe reiterated that diverting crude oil meant for local refineries is illegal. The Commission highlighted ongoing disputes between refiners and producers regarding the inconsistent implementation of the Domestic Crude Supply Obligation (DCSO) policy.

Refiners have accused producers of failing to meet supply terms, preferring to export crude instead, while producers argue that refiners often fail to meet commercial and operational terms, forcing them to seek alternative markets.

“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,” he said.

The regulator has cautioned both parties against further breaches, urging refiners to adopt international best practices in procurement and operations. It also stressed that producers must not deviate from the conditions outlined in the DCSO policy without obtaining explicit permission from the Commission Chief Executive (CCE) before selling crude outside the agreed framework. This measure aims to prevent misuse and ensure compliance.

Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to guarantee a stable supply of crude oil to domestic refineries and enhance Nigeria’s energy security. He stated that the NUPRC will now enforce strict compliance with the DCSO policy, including taking action against defaulting oil companies.

The Commission has already taken significant regulatory steps, such as developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as creating a framework and procedural guide for DCSO implementation.

The CCE emphasised that the NUPRC will no longer tolerate violations of laws governing domestic crude supplies to local refineries, as such actions jeopardise the country’s energy security. “Kindly note that the diversion of crude cargo designated for domestic refineries is a contravention of the law and the Commission will henceforth disallow export permits for designated crude cargos for domestic refining,” he added.