President Muhammadu Buhari has directed government establishments to comply with the Senate resolution passed in November 2022, recognising Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as the sole entity to regulate and monitor the activities of all existing crude oil export terminals in Nigeria.
The resolution was taken in line with Section 7ee of the Petroleum Industry Act (PIA) 2021.
Among the affected bodies are NUPRC, Nigerian Midstream/Downstream Regulatory Authority (NMDPRA), the Nigerian National Petroleum Company Limited (NNPCL), Federal Ministry of Industry, Trade and Investment (FMITI), industry players and relevant Ministries, Departments and Agencies (MDAs) are affected.
A memorandum dated May 3, 2023, signed by the Chief of Staff to the President, Prof. Ibrahim Gambari, mandated the Minister of State, Ministry of Petroleum Resources; Commission Chief Executive of NUPRC and the Authority Chief Executive of NMDPRA, to stop exercising regulatory role on any existing crude oil export terminal established prior to the effective date of the PIA 2021.
The memo titled: Regulatory Oversight of Crude Oil Terminals with reference number SH/COS/24/A/78 further directed the Minister of State for Petroleum Resources to ensure immediate compliance and report back within 14 days.
It further directs 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.
The letter was to the Secretary to the Government of the Federation, Minister of Trade, Industry and Investment, Minister of Transportation, Director General of Directorate of State Security, National Security Adviser, Group Chief Executive of NNPCL, Chairman of the Oil Producers Trade Section, President of Lagos Chamber of Commerce, Industry, manufacturing and Agriculture, Chairman of Independent Petroleum Producers Group and the Office of the Commander-in-Chief.
Recall that the Senate Ad-Hoc Committee on the Investigation of oil lifting, theft and impact on petroleum production and oil revenues, in its report released November, 2022, 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.
Of the 24 recommendations, the report also recommended 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.”
In spite of the endorsement of the Senate recommendations by the Presidency, it appears the aspect of regulation and monitoring of activities at crude oil export terminals has not been given the required effect, therefore necessitating the recent express directives from the Presidency, on the matter.
