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The law firm acknowledged that the PIA permits the imposition of domestic crude oil supply obligations by the NUPRC on lessees of upstream petroleum operations towards enhancing local refining capacity, preventing shortages and inadequate supply, supporting strategic economic development and promoting energy security.

It added that to ensure a steady supply of crude oil to the domestic market, the Production Curtailment and Domestic Crude Oil Supply Obligations Regulations 2023 prioritised domestic supply obligations over export commitments, even where production in a quarter falls below the allocated production quotas.

Both the commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority are responsible for the implementation of the DCSOs.

According to the publication, the NMDPRA is tasked with providing NUPRC with the crude oil requirements for operational refineries and notifying the commission of any shortages or inadequate supply conditions affecting local refineries regularly.

However, it called on industry stakeholders to engage in a forward-thinking approach that accounts for potential regulatory shifts due to relevant provisions of the PIA like Section 109 (4) and Section 231, among others, while maintaining operational and commercial flexibility.

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