The crude disaster rocking the Dangote Oil Refinery took a brand new twist on Friday because the refinery engaged in an change of phrases with the Nigerian Upstream Petroleum Regulatory Fee.
The PUNCH stories that the Dangote Group on Thursday, accused the NUPRC of failing to implement the Home Crude Provide Obligations successfully, saying it’s but to get sufficient crude domestically.
Reacting, the NUPRC debunked the declare on Friday, stating that it facilitated the availability of over 29 million barrels of crude oil to Dangote Refinery from January to June 2024.
Nevertheless, in a swift response, the Dangote Refinery mentioned it didn’t obtain any 29mb of crude.
The fee, in an announcement signed by its administration on Friday, defined that as a part of its dedication to make sure the enforcement of Part 109 of the Petroleum Business Act, 2021, 9 refineries had been equipped crude regardless of low crude oil manufacturing.
The fee mentioned its strategic commitments to Nigeria’s vitality safety had led to the availability of 32 million barrels of crude to Dangote Refinery and different native producers within the first half of 2024.
“The NUPRC, in its effort to implement Part 109 of the PIA 2021 has developed and gazetted Regulation of the Manufacturing Curtailment and Home Crude Oil Provide Obligation Regulation 2023. The NUPRC took a further step to make sure that crude producers furnish the fee with copies of all crude oil gross sales and buy agreements entered or any safety curiosity entered, that’s tied to crude oil manufacturing.
“The fee on a number of events has additionally engaged Dangote and native refiners to make sure their provide quota is met according to the provisions of the PIA. For efficient implementation of the DCSO, the NUPRC established a working committee comprising of NUPRC, the Oil Producers Commerce Part, the Impartial Petroleum Producers Group, the Crude Oil Refinery-House owners Affiliation of Nigeria and the NNPC Upstream Funding Administration Providers.”
The NUPRC argued that it had facilitated the home provide of crude oil to Dangote Refinery and different refineries utilizing the month-to-month manufacturing curtailment platform.
“A breakdown exhibits that 9 refineries have benefitted from the 32,088,122 barrels of crude as Dangote alone loved 29,047,098 barrels out of the overall provide between January to June 2024,” it added.
In accordance with the fee, the Warri Refinery obtained 949,670 barrels; NDPR-Refinery received 823,395 barrels of crude; the Port Harcourt refinery obtained 471,123 barrels; the Seplat-WPSOL refinery was allotted 419,541 barrels whereas the Waltersmith-WSPOL refinery received 296,353 barrels.
Different beneficiaries included the Edo Refinery which received 58,504 barrels of crude and the Du-port refinery which received 22,438 barrels of crude.
It added that within the pursuit of its mandate, if it turns into needed for licences to be withdrawn, the fee will achieve this but it surely won’t resort to the ‘presumptuous and arbitrary’ withdrawal of licences due to the sanctity of contract.’
“The regulator as a topic professional is of the opinion that arbitrary revocation of licences is just not in the very best curiosity of the nation notably within the period of low funding arising from the onslaught in vitality transition,” it added.
Dangote refinery reacts
In the meantime, the administration of the Dangote Petroleum Refinery continued to induce the NUPRC, to implement the home crude provide obligation as specified within the Petroleum Business Act, sustaining that refineries in Nigeria must be allowed to purchase crude straight from the businesses that produce it in Nigeria somewhat than from worldwide middlemen, as enshrined within the PIA.
Spokesperson for the Dangote Group, Anthony Chiejina, mentioned Friday night time, “We’re in receipt of NUPRC’s assertion that they’ve facilitated the allocation of 29 million barrels of crude oil to the Dangote Petroleum Refinery and Petrochemicals, we wish to thank them for this allocation however on the similar time, we want to allow them to know that we’re but to obtain these cargoes.
“Other than the time period provide we bilaterally negotiated with NNPCL, up to now NUPRC has solely facilitated the acquisition of 1 crude cargo from a home producer.
“The remainder of the cargoes now we have processed had been bought from worldwide merchants.”
Chiejina added that every one the refinery is asking for is for refineries in Nigeria to purchase crude straight from the businesses that produce it in Nigeria somewhat than from worldwide middlemen.
“Sadly, the NUPRC has successfully admitted of their assertion, that they are going to be unable to implement the home crude provide obligation as specified within the PIA, citing ‘sanctity of contracts’ as an excuse,” Chiejina concluded.
The PUNCH remembers that the administration of the Dangote Group had alleged that the IOCs had been nonetheless irritating crude provide to the 650,000-capacity refinery.
The group alleged that the IOCs insisted on promoting crude oil to its refinery by way of their overseas brokers, saying the native worth of crude will proceed to extend as a result of the buying and selling arms supply cargoes at $2 to $4 per barrel, above NUPRC’s official worth.
The group additionally alleged that the overseas oil producers appear to be prioritising Asian nations in promoting the crude they produce in Nigeria.
The Vice President, Oil & Gasoline, Dangote Industries Restricted, DVG Edwin, mentioned, “If the Home Crude Provide Obligation pointers are diligently applied, it will make sure that we deal straight with the businesses producing the crude oil in Nigeria as stipulated by the Petroleum Business Act.”
Edwin insisted that IOCs working in Nigeria have persistently annoyed the corporate’s requests for locally-produced crude as feedstock for its refining course of.
He highlighted that when cargoes are provided to the oil firm by the buying and selling arms, it’s typically at a $2 to $4 (per barrel) premium above the official worth set by the Nigerian Upstream Petroleum Regulatory Fee.
Edwin was reacting to an announcement by the Chief Government of the NUPRC, Gbenga Komolafe, who in an interview on nationwide tv mentioned, “It’s ‘misguided’ for one to say that the Worldwide Oil Firms are refusing to make crude oil accessible to home refiners, because the Petroleum Business Act has a stipulation that requires a willing-buyer, willing-seller relationship.”
The Chief Government of Nigerian NMDPRA, Farouk Ahmed, debunked the declare, saying Nigeria couldn’t rely closely on the Dangote refinery for its gas provide.
Ahmed mentioned Dangote diesel has a better sulphur content material than those imported into the nation.
In accordance with him, the refinery had requested the regulator to cease giving import licences to different entrepreneurs to be the one gas provider in Nigeria.
“We can not rely closely on one refinery to feed the nation, as a result of Dangote is requesting that we must always droop or cease importation of all petroleum merchandise, particularly AGO and direct all entrepreneurs to the refinery, that’s not good for the nation when it comes to vitality safety. And that’s not good for the market, due to monopoly,” Ahmed burdened.
However the President of the Dangote Group, Aliko Dangote, denied the allegation, questioning how he may very well be a monopoly when the Nigerian Nationwide Petroleum Firm Restricted is renovating government-owned refineries with $4bn.
President Bola Tinubu has since ordered the NNPC to promote crude oil to Dangote in naira.