President Muhammadu Buhari has directed all government establishments in the oil and gas industry in Nigeria to immediately comply with the resolution passed by the Senate on the control of activities at the country’s crude oil export terminals.
The Senate in one of the resolutions in the report of its Ad Hoc Committee on the Investigation of oil lifting, theft and impact on petroleum production and oil revenues passed in November 2022, specifically indicated that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is the sole and only regulatory entity to regulate and monitor the activities of all existing crude oil export terminals in Nigeria. The resolution was taken in conformity with Section 7ee of the Petroleum Industry Act (PIA) 2021.
Chief executive of the Nigerian Petroleum Upstream Regulatory Commission, Engr. Gbenga Komolafe confirmed this yesterday.
Speaking on Arise TV Morning Show, Engr Komolafe said the PIA was very clear on the functions of the agencies created by it and unambiguously states their functions and responsibilities, especially as it relates to the two regulatory agencies – the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream/Downstream Regulatory Authority (NMDPRA).
The Senate report referred to had observed that some agencies were still engaging in activities at the export terminals in contravention of the extant provisions of the PIA, particularly sections 7(ee), 8(d), 32(ii) and 174(a). Such engagements, it noted, followed administrative directives from the Ministry of Petroleum Resources. It recommended that such directives be jettisoned as the law (PIA) takes precedence over administrative directives that are inconsistent with its provisions.
The report recommended that NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria including integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.Among about 24 recommendations, the report also recommended that there should be an immediate streamlining of the agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions, while NUPRC should strengthen and deploy all necessary procedures to firm up its oversight functions, including digital accounting mechanisms at all crude oil terminals for transparent hydrocarbon accounting.
It specifically recommended that “as intended in the PIA, the NMDPRA statutorily should concentrate fully on regulating the midstream and downstream activities i.e. from refineries, mid and downstream gas infrastructure, supply, storage and distribution of refined petroleum products,
petrochemicals, virtual pipelines and retailing facilities, in line with the provisions of the PIA, including future stand-alone crude oil and natural gas export terminals.”
However, in spite of the Senate resolution which expressly stated the responsibilities of the two regulators and their relationship with the crude oil
and gas export terminal, both agencies created by the PIA, 2021 were still carrying out activities at the terminals, thereby creating confusion among
other industry stakeholders. The concern expressed by groups such as the Oil
Producers Trade Section (OPS), Lagos Chamber of Commerce, Industry,
Manufacturing and Agriculture (LCCIMA), and the Independent Petroleum Producers Group (IPPG) may have necessitated the intervention of the Presidency.
In a memorandum dated May 3, 2023, signed by the Chief of Staff to the President, Prof. Ibrahim Gambari, and directed to the Minister of State,
Ministry of Petroleum Resources; Commission Chief Executive of NUPRC; and the Authority Chief Executive of NMDPRA, it was also directed that the exercise of any regulatory role by the NMDPRA on any existing crude oil export terminal established prior to the effective date of the PIA 2021 should cease immediately.
The memo titled Regulatory Oversight of Crude Oil Terminals with reference number SH/COS/24/A/78 further directed the Minister of State for PetroleumResources to ensure immediate compliance; and report back within fourteen (14) days confirming compliance with the resolution by NUPRC, NMDPRA, NNPCL, FMITI, industry players and relevant MDAs, as stated in the first directive in the correspondence from the Presidency.
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