The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively working to address misconceptions surrounding Nigeria’s oil industry. The Commission has dismissed allegations that crude oil theft in the country is rampant and clarified that claims of International Oil Companies (IOCs) refusing to supply crude to domestic refineries, including Dangote Refinery, are unfounded.
In an interview with Arise News, Engineer Gbenga Komolafe, the Chief Executive Officer of the NUPRC, stated that approximately 40% of what is considered crude oil theft stems from metering inaccuracies. He highlighted ongoing efforts to rectify these issues, which could save Nigeria billions of dollars. Current estimates place crude oil theft at 100,000 to 120,000 barrels per day, significantly lower than prior claims of 300,000 to 400,000 barrels daily.
Komolafe emphasized that the Petroleum Industry Act (PIA) mandates a willing buyer-willing seller framework for crude transactions and that IOCs are complying with this provision. He explained that Section 109 of the PIA obligates producers to supply crude to local refineries, a requirement actively enforced by the NUPRC.
“Assertions that IOCs are refusing to sell crude locally are incorrect,” Komolafe stated. “The NUPRC ensures producers meet their domestic supply obligations as specified under the PIA, coordinating with the Nigeria Midstream and Downstream Petroleum Regulatory Agency to allocate volumes to local refiners.”
The Commission has also implemented rules of engagement to address operational challenges and ensure compliance with international standards for crude supply.
Komolafe acknowledged the negative impact of crude oil theft, including reduced production volumes and a decline in investor confidence in Nigeria’s onshore oil sector. However, he noted significant progress in combating theft due to collaborative efforts by security agencies, the NNPC, and regulators.
Additionally, the NUPRC has introduced the “Nigerian Upstream Petroleum Measurement Regulation” to improve accuracy in oil measurement. Engineering integrity audits are being conducted across 187 flow stations to standardize metering systems.
“Through independent audits, we’ve discovered that much of the alleged crude theft is due to metering errors,” Komolafe said. “Addressing this issue will save Nigeria billions annually.”
