Mohammed Shosanya

The Nigerian Upstream Petroleum Regulatory Commission,NUPRC is making move to enforce a domestic crude supply obligation.

The action was necessary as more private refineries indicate readiness to commence production soon in Nigeria.

The agency is taking all necessary steps within the prescriptions of the Petroleum Industry Act (2021) to ensure adequate and consistent supply of feedstock to operators. It cautioned that there would be consequences for sabotaging the process, a statement by Mrs Olaide Shonola, Head, Public Affairs and Corporate Communications, said.

It also said the pre-emptive steps are being taken because it would send wrong and unbecoming signals to the international business community if operators of domestic refineries in one of the world’s largest crude oil-producing countries start importing feedstock for their production.

It added:”It was in contemplation of this that Section 109 of the Petroleum Industry Act (PIA) 2021 introduced the Domestic Crude Supply Obligation (DCSO) to Nigeria’s oil industry in a bid to ensure that domestic refineries are not starved of crude oil supply for their operation.

“The Commission has already taken some steps in furtherance of this goal by developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation (PC&DCSO) Regulation 2023, in line with the provisions of Section 109(2) of the PIA 2021, preparing for approval and implementation the DCSO framework and procedure guide, processing of application for refinery feedstock approval, requesting all oil producing companies to provide information on their planned crude oil off-take and existing sales purchase agreement, and advising the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to furnish it with the domestic crude oil requirement of refineries in operation”

NUPRC said it was determined to take further necessary steps required to avoid inadequate supply of crude oil to domestic refineries and would not hesitate, where necessary, to enforce the stipulated penalties for violations and non-compliance to the provisions of the Act.

In pursuance to Section 109(2) of the PIA, the Commission gazetted the PC&DCSO Regulations which provides clarity on the obligations of the stakeholders,it said.

It added:”The law stipulates that the supply of crude oil to the domestic market shall be on a “willing buyer and willing seller” basis and the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) shall report to the Commission where there is inadequate supply to the refineries.

“The Commission has a responsibility to publish on a biannual basis, the domestic crude refining requirements of operating refineries in Nigeria as received from NMDPRA, in line with Section 109(3) of the PIA. Where there is a reported crude supply shortage from the Authority, the Commission is under obligation to issue a Request for Quotation (RFQ) to producers asking for submission of quotation for bridging the shortfall, whereupon the Commission will contact affected refineries to facilitate contract negotiations between the stakeholders. Failure to meet the terms will attract from the Commission an obligation on the oil producers to supply the required volumes and notify the Authority accordingly.

“In furtherance of this, and in line with the Commission’s mandate of ensuring crude oil supply to licensed refineries in Nigeria as enshrined in Section 109 (4) of the PIA, all the 52 exploration and production companies have been invited to a meeting on November 1, 2023, for alignment on the implementation of domestic crude oil supply obligation, operator’s compliance status and operator’s response. By October 27, 11 of the operators had responded, while that of the remaining 42 operators is still being awaited.

“Those that have so far responded are Dubri Oil Limited, Heirs Energies Limited, Waltersmith Petroman Oil Limited, Midwestern Oil & Gas Company Limited, Frontier Oil Limited, Mobil Producing Nigeria Limited, All Grace Energy Limited, Green Energy International Limited, Enageed Resources Limited and Pillar Oil Limited.

“The Commission reiterates its determination to apply all required penalties for default and has emphasised that a company that fails to respond to the Request for Quotation (RFQ) within the specified period is liable to pay an administrative fine of USD10,000, while a company that has not complied with its DCSO, where willing buyer(s) exist will not be granted an export permit. A company that fails to comply with the DCSO would be made to pay a penalty of 50% of the Fiscal Price per barrel not delivered”.

The Nigerian National Petroleum Company Limited (NNPCL) /Chevron Nigeria Limited (CNL) Joint Venture (JV) has inaugurated the Board of Trustees (BoT) of the Egbema OPUDIS Host Communities’ Development Trust (HCDT) in line with the Petroleum Industry Act (PIA).

Mr Esimaje Brikinn, General Manager, Policy, Government and Public Affairs, Chevron Nigeria Limitd (CNL),who spoke at the inauguration ceremony,solicited the support of the stakeholders to ensure the success of the PIA in the host communities.

Represented by Mr Rilwanu Momodu, Chevron’s Area Manager, Policy, Government and Public Affairs (PGPA). Mr. Brikinn,said that Chevron Nigeria Limited (CNL) was committed to fulfilling all it’s regulatory obligations by way of operationalizing the HCDTs and continued with the mutually-beneficial relationship that had existed between it and the host communities.

He stated that there was an enduring and robust partnership between the oil giant and it’s host communities adding that one of the core values of Chevron Nigeria Limited(CNL)was to ensure economic development and sustainability in it’s areas of operations.

He said that to drive development in the host communities, Chevron Nigeria Limited(GNL) enacted the Global Memorandum of Understanding (GMoU), a community-led participatory partnership model for community development in 2005.

According to him, the GMoU served as a developmental template for the oil multinational, adding that through the model, over 400 communities had benefited with over 600,000 persons life improved.

He added: “With the enactment of the PIA, a regulatory framework is now provided to enable the development of our host communities. Chevron has therefore transited from the era of GMoU to the PIA.

“As mandated by the Act, the vehicle of engagement between the settlor and the host communities is the HCDT. Today’s event is in fulfilment of that requirement to serve and ensure communities around where we operate continue to enjoy the benefits of economic development.

“Chevron is in support of this and other industry improvement initiatives by the Nigeria government. As we journey together, we request for the continued support of all our esteemed stakeholders to ensure the aims of the Act are fulfilled and the communities become more prosperous.”

He expressed optimism that the Act would create new operating environment where partnership would triumphed and industry challenges such as oil theft, work disruption, asset vandalism and insecurity would be completely eliminated.

He urged the inaugurated BoT to work closely with the Chevron Nigeria Limited(CNL)as partner to ensure the smooth operation of the company and to the benefits all the stakeholders.

Also speaking, Engr. Gbenga Komolafe, Chief Executive, Nigerian Upstream Petroleum Regulatory Commission(NUPRC) said that the Commission was delighted to witness the implementation of the several sections of the chapters in the PIA.

Represented by Mr. Okundia Kingsley, Manager, Health Safety and Environment, NUPRC, Warri Regional office, Engr. Komolafe said that the PIA had mandate for the establishment of the HCDTs in the oil producing areas.

According to him, the purpose was to strengthen sustainability, prosperity within host communities, providing direct social benefits from petroleum operations, enhancing peaceful and harmonious co-existence and creating a framework for the development of the host communities.

“We joined stakeholders in welcoming the birth of a new era of developmental projects and economic advancement of host communities.

“NUPRC in line with the global best practice and in collaboration with relevant stakeholders has developed the robust implementation strategy for the Trust.

“To positively impact against restiveness in the host communities and guaranteed seemless operations of the exploration and production companies among others,” he said.

U
The Commission’s Chief Executive expressed th hope that the peace and harmony exhibited by the communities under the Egbema OPUDIS HCDT would be sustained going forward.

He also expressed hope that management of the affairs of the Trust would address the developmental needs of the impacted host communities in the oil producing areas..

The King of Egbema Kingdom, Ubabiri Bini Pere IV, Agadagba of Egbema Kingdom urged those involved in the management of the HCDT to exhibit absolute commitment to ensure its success.

“It is a thing of joy to us that the PIA is coming to fruition in our Egbema Kingdom. I advised those involved in the operation to do their best to the benefit of everyone.

“We want serous people in the Trust to ensure its success so that we all will be proud of belonging to oil and gas producing communities,” he said.

Mohammed Shosanya

AITEO, has launched a unique and strategic crude oil movement innovation aimed at boosting the country’s oil output.

Aiteo,said in a statement that it has resolved to revamp the hitherto inactive Nembe Creek, among other innovative solutions aimed at repositioning the sector.

It explained that by the move, Aiteo is involved the Nigerian firm employing smaller river-going tankers to transport Nembe Creek from inland production sites to the global market.

This ingenious crude transport model will help guarantee higher production and boast the forex market stability in the country.

It explained that the step is aimed at revamping the Nembe Creek trunk pipeline, which has been inactive since February 2022.

Aiteo acquired the pipeline which was formerly under the management of Shell Plc in 2015.

The new approach adopted by the Aiteo, is to use smaller vessels to navigate the waterways of the Niger Delta and ensure the uninterrupted flow of Nembe Creek oil.

“Aiteo’s solution involves smaller ships meeting larger tankers, ensuring continuous oil flow.

“The innovative oil blend is designed to overcome existing barriers” the statement said.

Experts have described the move as a very innovative strategy,noting that while the strategy may incur higher costs, it puts Nigeria on a better stead to maintain its oil production levels considering impending OPEC quotas.

Besides, Aiteo’s strategic approach, also includes the deployment of a floating storage offloading vessel, the Galilean 7, positioned near the Brass terminal.

A group of ethnic youth leaders under the aegis of the Nigerian Ethnic Youth Leaders Council (NEYLC) has hailed Aiteo’s founder, Benedict Peters, over what it described as his ingenious business model.

The group noted that the move will help Nigeria out of economic and forex problems caused by a drop in crude oil production caused by sabotage.

The NEYLC is made up of the Arewa Consultative Youths Movement (ACYM), Ohanaeze Ndigbo Youths Movement, Oduduwa Youths and Middle Belt Youths.

The group in a statement on Friday, by the Ohanaeze Secretary-General and Head of Coalition’s secretariat, Nwada Ike Chiama, stated; “We, the ethnic youth leaders across the country, have noted with delight the great leap taken by Aiteo under the visionary leadership of Benedict Peters.

“We are of the view that this giant step will go a long way in repositioning the nation’s oil sector and ultimately lead to a significant increase in oil production.

“This, of course, is in tandem with the present administration of President Bola Tinubu’s desire to increase oil production.

“We know for a fact that Benedict Peters’ ingenious business model will help Nigeria out of economic and forex problems caused by drop in crude oil production caused by sabotage.

NEYLC therefore commended Benedict Peters and Aiteo, and urge the Federal Government, through its relevant Ministries, Departments and Agencies to cooperate and encourage the firm to achieve its goals within the shortest possible time.
END.

Mohammed Shosanya

NNPC Retail Limited, a subsidiary of NNPC Limited,has reiterated its commitment to a deregulated downstream sector and implored players in the sector to ensure customer service optimization. This statement was made by

The company’s Managing Director Mr. Huub Stokman,disclosed this at the recent 17th edition of the Oil Trading and Logistics, OTL Africa Downstream Week

Themed Energy, Synergy, and New Beginnings, this year’s OTL Africa, presented participants with insightful panel sessions and dynamic speakers who have contributed to shaping the industry.

The panelists addressed the topical issue of deregulation and its attendant impacts on marketers, their roles in a competitive market and its effects on consumers.

They also explored the diverse options available to marketers and consumers in optimizing operational values against the backdrop of the current realities of pricing and the country’s economic situation.

At the session,Huub Stokman spoke about the company’s vision of a deregulated market:

“We wanted deregulation to happen, and we understand that it is not an easy feat. Looking at the deregulation across other countries, the transition process has always been a challenge, especially if it was a regulated market for many decades. Stakeholders within the value chain, including us in the retail business, must understand and get used to the process and what this means for the sector.” Huub said.

According to him,the industry needs to innovate to maintain business operations while understanding the new realities of the industry.

“The future of retail in Nigeria started with deregulation, and we need to explore different measures to ensure smooth business operations at our facilities, while providing the best services to our consumers. In addition, the business environment is competitive, which means our customers can go anywhere. Our goal is to ensure we adopt a progressive approach in bringing other benefits, that will remain valuable for the consumers.” he added.

The panelists, contributors, players and stakeholders at the OTL Africa 2023 collectively urged the federal government to modify and implement policies that would encourage regulators and stakeholders to work in unity to ensure the growth of the industry.