Nigeria’s apex petroleum industry regulatory authority, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says there was no illegality committed by ExxonMobil Nigeria and its affiliates in the Barumk Gas lifting transaction at the Bonny River oil terminal (BRT) contrary to reports in the media.
On June 11, there were reports in both the traditional and online media about certain illegalities committed by ExxonMobil Nigeria involving alleged lifting of petroleum products in the BRT without regulatory authorisation.
The allegations against the American multinational oil firm were said to have emanated from a petition by the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, to the Chief of Defence Staff, Lucky Irabor.
The letter, titled: “Economic Sabotage, Criminal Damage and Theft Through Illegal Petroleum Lifting Operations at Bonny River Terminal”, accused ExxonMobil of lifting Butane consignment at the terminal with the vessel, marked Barumk Gas without due authorization or involvement of the NMDPRA.
The letter was said to have quoted Ahmed as claiming that in carrying the transaction, Exxonmobil overlooked NMDPRA as the agency of government statutorily responsible for regulating operations at the oil terminal.
The NMDPRA Chief had asked the CDS to “urgently prevent the sailing out of Barumk Gas until investigations into the matter are concluded.”
But, reacting to the claims by the NMDPRA, the Chief Executive Officer of the NUPRC, Gbenga Komolafe, said in a statement on Wednesday in Abuja that there was absolutely no illegality in the transaction, as Exxonmobil duly applied for and obtained the necessary clearance from NUPRC before undertaking the lifting of the consignment.
“It is important to state that Exxonmobil formally applied to NUPRC for approval of its operations as an integrated operation, in line with Sections 8(d) and 318 of the Petroleum Industry Act, 2021. Following careful evaluation of the request, NUPRC deemed it fit and granted approval accordingly,” Komolafe clarified in the statement.
Giving further details on the transaction, the petroleum industry regulatory authority confirmed that Exxonmobil had applied for the necessary clearance to lift about 12,600 metric tonnes of Butane aboard a vessel named Barumk Gas on May 26, 2023.
He said on June 7, 2023, Barumk Gas berthed at the loading jetty at BRT and loading operation commenced and ended on June 8, 2023, after which an NUPRC official on site at the BRT issued Certificate of Quantity and Quality (CoQ), as statutorily required for the fulfilment of requirements of accurate hydrocarbon accounting, reporting and ability of the vessel to sail to its delivery destination in line with global best practice.
Komolafe insisted the said operation was legitimate and in line with the statutory mandate of the Commission as the technical and commercial regulator of the upstream sector in Nigeria as stipulated by law.
“The Commission is not aware of any illegality in the transaction and none was committed by either ExxonMobil Nigeria and its affiliates or the NUPRC as an agency of Government,” he maintained.
The allegations by NMDPRA appears to re-enact the era of muscles flexing between the downstream petroleum industry regulator and its Upstream industry counterpart over which of them should exercise control over the management and control of operations at the offshore oil terminal.
The conflict was thought to have been put to rest by former President, Muhammadu Buhari following the recommendation by the Attorney General of the Federation based the report by the Senate.
But the latest struggle for supremacy seem to contravene the presidential directive on the matter, which conferred supreme authority on the NUPRC as the sole regulatory agency in charge of all offshore oil terminals in the country.
An investigative report submitted on October 2022 by the Senate Ad Hoc Committee on Petroleum concerning crude oil lifting, theft and the impact on petroleum production and oil revenues had identified the presence of too many entities at the oil terminals as the cause of the confusion that fuelled the massive corruption at the facility.
In its recommendations, the Committee urged the government to direct agencies that did not have any direct role to play in the crude oil export operations to quit the terminal.
The committee specifically noted the dual and conflicting regulatory roles by the NMDPRA, mandated to take charge of the transportation, marketing and distribution of refined petroleum products to all parts of the country against those of the NUPRC, the agency mandated by law to exercise regulatory responsibilities in the Upstream sector of the petroleum industry, and its counterpart in the downstream sector.
In accepting the recommendations of the Committee, then President Buhari, through a correspondence Ref. SH/COS/24/A/78 signed by his Chief of Staff, Ibrahim Gambari, directed immediate compliance with the Senate Resolution that “NUPRC is the sole and only regulatory entity to regulate and monitor activities of all existing crude oil export terminals in Nigeria” in compliance with Section 7(ee) of the PIA (2021).
Buhari, in a correspondence to the Minister of State (Ministry of Petroleum Resources) and the Chief Executive Officers of both the NUPRC and NMDPRA, further directed that the exercise of any regulatory role by the NMDPRA on any existing crude oil terminal established prior to the effective date of the Petroleum Industry Act (PIA) should cease immediately.
Consequently, the NUPRC notified industry operators and relevant stakeholders of the Presidential directive and its readiness to immediately assume full regulatory oversight.
