Nigerian Government Greenlights Crude Oil Sales to Local Refineries for Naira Strengthening

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In a bid to fortify the Naira, the Nigerian government has sanctioned the sale of crude oil to both Dangote and local refineries.

During a briefing in Abuja on Monday, Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, disclosed this significant development. He underscored the growth in Nigeria’s total reserves of crude oil and condensate, reaching 37.5 billion barrels as of January 1, 2024, with a life index of 68.01 years.

Komolafe emphasized the collaborative efforts of the commission with key stakeholders, including NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, the Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery. Together, they formulated a comprehensive template to facilitate participation in the Direct Crude Oil Sale and Offtake (DCSO) initiative, ensuring a consistent supply of crude oil to domestic refineries.

Under the framework of the Petroleum Industry Act (PIA), designed to streamline the implementation of crude oil obligations for producers and refineries, Komolafe clarified that transactions could be conducted in either Naira or dollars. He stressed that conducting transactions in Naira could alleviate pressure on the exchange rate, thereby benefiting the overall economy. Additionally, he highlighted the PIA’s broader objective of advancing the midstream sector, which represents a commendable provision of the legislation.

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