FG Mandates Oil Firms to Supply 483,000 bpd to Local Refineries.

On Friday, new regulations were introduced, compelling Nigerian oil producers to dedicate 483,000 barrels per day (bpd) to local refineries during the first half of 2024. This initiative is geared towards ensuring a consistent supply for domestic refining in Africa’s largest oil-exporting nation. According to a Reuters report, the upcoming operational phase in 2024 will involve the Dangote oil refinery and at least three government-operated refineries.

The recently released Domestic Crude Supply Obligation guidelines from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) specify that the Dangote refinery, boasting a capacity of 650,000 barrels per day, will be the primary beneficiary, receiving 325,000 bpd. NUPRC data forecasts the operation of six refineries with a combined refining capacity of 864,500 bpd by 2024, necessitating oil producers to fulfill slightly over half of the crude requirements.

Enacted in 2021, the Petroleum Industry Act introduced a provision mandating Nigerian oil producers to assign a portion of their crude to domestic refineries to avert shortages. While the enforcement of this requirement is pending, NUPRC affirms that the refineries will pay global market prices for the supplied crude.

The participation in this program encompasses 48 oil producers, including major entities like TotalEnergies, Chevron, Shell, and ExxonMobil, predominantly drawing production from joint ventures with the Nigerian state oil firm, NNPCL. Gbenga Komolafe, the Chief Executive of NUPRC, underscored the regulator’s dedication to enforcing these regulations, signaling Nigeria’s intention to initiate its oil refining operations.