The oil sector was treated to a drama at the weekend as the Dangote Group and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) engaged in a media scuffle on the allocation of crude oil.
Recall that the Dangote Group had accused NUPRC of not effecting the domestic crude supply obligations as requested by law on Thursday.
But the NUPRC on Friday said it facilitated the supply of over 29 million barrels of crude oil to Dangote Refinery from January to June 2024.
However, in a swift response, the Dangote Refinery said it did not receive any 29m barrels of crude supply.
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NUPRC, in a statement signed by its management on Friday, explained that as part of its commitment to ensure the enforcement of Section 109 of the Petroleum Industry Act, 2021, nine refineries were supplied crude despite low crude oil production.
It said its strategic commitments to Nigeria’s energy security led to the supply of 32 million barrels of crude to Dangote Refinery and other local producers in the first half of 2024.
“The NUPRC, in its effort to enforce Section 109 of the PIA 2021, has developed and gazetted Regulation of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023. The NUPRC took an additional step to ensure that crude producers furnish the commission with copies of all crude oil sales and purchase agreements entered or any security interest entered that is tied to crude oil production.
“The commission on several occasions has also engaged Dangote and local refiners to ensure their supply quota is met in line with the provisions of the PIA. For effective implementation of the DCSO, the NUPRC established a working committee comprising of NUPRC, the Oil Producers Trade Section, the Independent Petroleum Producers Group, the Crude Oil Refinery-Owners Association of Nigeria and the NNPC Upstream Investment Management Services.”
NUPRC argued that it had facilitated the domestic supply of crude oil to Dangote Refinery and other refineries using the monthly production curtailment platform.
“A breakdown shows that nine refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone enjoyed 29,047,098 barrels out of the total supply between January to June 2024,” it added.
According to the commission, Warri Refinery received 949,670 barrels; NDPR Refinery got 823,395 barrels of crude; Port Harcourt Refinery received 471,123 barrels; Seplat-WPSOL Refinery was allocated 419,541 barrels while Waltersmith-WSPOL Refinery got 296,353 barrels.
Other beneficiaries included Edo Refinery which got 58,504 barrels of crude and Du-port Refinery 22,438 barrels of crude.
But in a swift response, Dangote Petroleum Refinery denied getting such amount of crude oil allocation.
The spokesman for Dangote Group, Anthony Chiejina, while expressing appreciation for the allocation, stated the company was however yet to receive any such amount of crude.
Chiejina, in a statement, said apart from the crude supply bilaterally negotiated with NNPCL, NUPRC only facilitated the purchase of one crude cargo from a domestic producer.
“The rest of the cargoes we have processed were purchased from international traders,” he stated.
Chiejina added that all the refinery is asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in the country, rather than from international middlemen.
“Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA, citing ‘sanctity of contracts’ as an excuse,” Chiejina concluded.
Recall that the management of the Dangote Group had alleged that the IOCs were still frustrating crude supply to its 650,000-capacity refinery.
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