April 16, 2024

Buhari stirs hornets’ nest, empowers NUPRC to supervise crude oil activities at export terminals

Oredola Adeola


Nigeria’s outgoing President Muhammadu Buhari has stirred the hornets’ nest by causing what looks like an acrimonious debate over whose right it is to supervise the activities of oil producers at the export terminals across the country.


This development which is capable of plunging the industry into avoidable crisis became a source of concern evident in the latest power that has been given by Buhari who doubles as the Minister of Petroleum Resources to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to supervise crude oil export terminal activities in the country.


Engr. Gbenga Komolafe, NUPRC’s Chief Executive confirmed this in an interview on Arise TV breakfast programme, monitored by EnergyDay on Monday.


According to him, the President’s approval has introduced clarity and efficiency to Nigeria’s crude oil production activities.


EnergyDay’s check showed that the controversy over whose right it is to supervise crude oil activities at the export terminal has been on for many years since August 2021, when the implementation of the Petroleum Industry Act (PIA) paved the way for the establishment of two regulatory agencies – Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and Nigeria Midstream Downstream Petroleum Regulatory Agency (NMDPRA)- that were created out of the now defunct Department of Petroleum Resources (DPR).


The controversial clauses created by the PIA have unfortunately empowered the two regulators to be responsible for regulating activities within the crude oil export terminals.


For instance, the SECTION 7EE of the PIA permitted the NUPRC to issue certificates of quality and quantity to exporters of crude oil, natural gas, or other petroleum products from integrated operations and crude oil export terminals established prior to the effective date and the commissions shall have the power to monitor and regulate the operations of crude oil export terminals and the responsibilities of weights and measure at the crude oil export terminals shall cease to exist from the effective date.


Whereas the same legislation offered the power in Section 32ii to the NMDPRA to also issue certificates of quality and quantity to exporters of crude oil, LNG, and Petroleum products.


While two clauses remains in their true state unamended, the two regulatory agencies have been fighting the right to issue export permits to the operators.


The confusion has forced the operators to apply for permits from the two but officially pay fees to only NMDPRA, leaving NUPRC out, as they insisted that they can’t afford to pay twice for same service.


As  a form of solution to the legislative crisis, experts have recommended that the review and amendment of controversial clauses in the PIA, insisting that a delineating the specific roles of each regulator will provide a friendly operating environment for investors.


They also emphasised that the right to regulate all the activities in the upstream sector is the primary duty of the NUPRC, hence the Commission should have the unalienable right to supervise export terminals, while the NMDPRA should focus on the midstream and downstream activities.