The domestic crude oil supply obligation: Impact on upstream petroleum operations in Nigeria

Domestic Crude Supply Obligation ("DCSO" or the "Policy") is a policy tool used by oil-producing nations to prioritize domestic energy security, economic stability, and industrial development by ensuring sufficient crude supply to the domestic markets before exporting. This policy aims to balance national interests with the interest of oil producers that may prefer to sell on the international market for higher profits. Major oil-producing countries have separately pursued DSCO policies to support their refining industries, reduce exposure to exchange rate volatility, and strengthen their local energy security.

This article provides an in-depth analysis of the DCSO framework, its regulatory enforcement mechanisms, and the implications for upstream petroleum operations in Nigeria.

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