- Only Dangote Refinery Got 29 Million Barrels Out Of 32 Million Barrels Allocation- NUPRC
- Says Despite Efforts To Enforce DCSO Framework, Dangote Refinery Still Accuse Us Of Weak Enforcement- NUPRC
- It’s A Lie, We Haven’t Receive These Cargoes, Dangote Refinery Fires Back
- NUPRC Has Only Facilitated Purchase Of One Crude Cargo From Domestic Producer
The ongoing face-off between the operators of Dangote Refinery and Petrochemical Plant and one of the regulatory agencies in the Nigerian oil and gas ecosystem, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has resumed in full force.
The operators of the 650k barrels per day refinery, Dangote Industries Limited on Friday debunked claims by the government agency that it has allocated 29 million barrels of crude to it.
The company clarified that it had not received 29 million barrels of crude as claimed by the NUPRC.
The company stated this in a press statement signed by its Chief Branding and Communications Officer, Anthony Chiejina.
Earlier, NUPRC had fired at Dangote saying it enforced the Domestic Crude Supply Obligation (DCSO) as nine refineries have benefitted from its supply of 32 million barrels of crude — with Dangote alone getting 29 million barrels out of the total supply between January and June 2024.
The NUPRC said despite its efforts to enforce the crude oil obligations through the development of the DCSO framework, the Dangote refinery was still accusing it of weak enforcement.
The commission said it has facilitated over 32 million barrels of crude oil supply to domestic refineries in the country.
“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 said.
“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.”
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The NUPRC said it has facilitated the domestic supply of crude oil to the Dangote refinery and other refiners using the monthly production curtailment platform.
“These strategic commitments to Nigeria’s energy security have led to the facilitation of the supply of 32 million barrels of crude to Dangote Refinery and other local producers in the first half of 2024,” the commission said.
The commission went a step further to provide a breakdown of how the nine refineries have benefitted from the 32,088,122 barrels of crude — with Dangote alone getting a total of 29,047,098 barrels out of the total supply in the first half of 2024.
“The Warri Refinery received 949,670 barrels; NDPR-NDPR Refinery got 823,395 barrels of crude; the Port Harcourt Refinery received 471,123 barrels; Seplat-WPSOL Refinery was allocated 419,541 barrels while Waltersmith-WSPOL Refinery got 296,353 barrels,” the commission said.
“Other beneficiaries were Edo Refinery that got 58,504 barrels of crude and Du-port Refinery that was supplied 22,438 barrels of crude.”
According to NUPRC, Aradel Refineries Ltd in Ogbele, Rivers State, has 11,000 barrels per day (bpd) capacity; OPAC Refineries, Kwale, Delta state, has a capacity of 10,000 bpd; while Waltersmith Refinery in Ohaji-Egbema, Imo State, has a 50,000 bpd capacity.
“Edo Refinery & Petrochemical Company Ltd, has a capacity of 1,000 bpd; Dangote Refinery Ibeju-Lekki, Lagos State, has 650,000 bpd capacity; (Old) Port-Harcourt Refinery, Rivers State has a capacity of 54,000 bpd while that of Warri Refinery, Delta State is 75,000 bpd,” NUPRC said.
“Much as the NUPRC has tried to ensure the enforcement of the provisions of Section 109 of PIA, 2021, the producers have equally responded to the regulator saying that conventionally oil production is funded through pre-export financing.
“This means that crude has been pledged for funding and the whole transaction is guided by the ‘Doctrine of the Sanctity of Contracts’. The parties already agreed that the licensees would pay the cost of the development and they explained to the commission that most of the funding was provided by traders at a mutually agreed price.”
Aside from that, NUPRC said producers equally reported some operational challenges on the part of refiners.
“In fulfilment of the NUPRC mandate to enforce section 109 of the PIA, the NUPRC has ensured that international standard practices are followed in a manner that will not scare investors and further worsen the already weak revenues from crude oil,” the commission said.
Responding to this, Dangote refinery said it has not received the crude supply.
“We are in receipt of NUPRC’s statement that they have facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals,” the company said.
“We would like to thank them for this allocation but at the same time let them know that we are yet to receive these cargoes.
“Aside from the term supply we bilaterally negotiated with NNPC, so far NUPRC has 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 said refineries in Nigeria should buy crude directly from the companies that produce it in Nigeria — rather than from international middlemen, as specified in the Petroleum Industry Act (PIA).
Chiejina said 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.
It is left to be seen how this latest face-off will pan out.
