Examining the Operationality and Enforcement of the Domestic Crude Oil Supply Obligation

Pursuant to the Petroleum Industry Act (“PIA”) 2021, the Nigerian Upstream Petroleum Regulatory Commission (“Commission”) is empowered to issue regulations or guidelines on the mechanism for the imposition of a domestic crude oil supply obligation (“DCSO”) on lessees of upstream petroleum operations. Further to the foregoing, the Commission has issued the Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023 (“Regulations”) and the Guidelines for the Operationalisation of Domestic Crude Oil Supply Obligation, 2024 (“Guidelines”). The essence of the DCSO is to ensure adequate supply of crude oil to domestic refineries.