Emmanuel Addeh in Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has commenced consultations with stakeholders on a new framework for domestic crude oil and gas supply, including a proposed swap arrangement aimed at reducing logistics costs and improving the availability of feedstock for local refineries.
The Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, disclosed this during a visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja, where she said discussions on the proposed crude oil swap were still at an early stage.
Under the proposed arrangement, producers or suppliers with domestic supply obligations could exchange their obligations based on the location of their crude and the proximity of other suppliers to domestic offtakers, an NUPRC statement in Abuja stated at the weekend.
Eyesan explained that rather than moving crude over long distances to meet specific obligations, companies could agree to swap supplies and subsequently settle the transactions through a netting mechanism.
“How the swap works is that I have an obligation somewhere and I am close to an export facility. Somebody else has an obligation inland and his own facility is close to a domestic offtaker.
“So, instead of trying to move from one end to the other, we just agree on a swap arrangement and there is a mechanism for them netting off,” she pointed out.
She said the framework, once finalised, was expected to improve compliance with the Domestic Crude Supply Obligation (DCSO) and Domestic Gas Supply Obligation (DGSO) with the gas component to be coordinated with the Gas Aggregation Company of Nigeria Limited (GACN).
The move comes against the backdrop of significant improvement in the volume of crude supplied to domestic refineries, although imports of crude oil by local refiners have continued.
Latest NUPRC data showed that domestic refineries received 53.7 million barrels of crude between April and June 2026, representing a 97.4 per cent performance under the DCSO for the second quarter.
Despite the improved compliance, Eyesan said the commission was exploring additional measures with industry stakeholders to address the continued need for crude imports and make domestic supply more efficient.
She also pledged to deepen collaboration with the NMDPRA, stressing the importance of greater coordination among regulators across the petroleum value chain.
The meeting also provided an opportunity for the two agencies to reaffirm their commitment to closer institutional collaboration, following an earlier visit by the Authority Chief Executive, Rabiu Umar, to the upstream regulator shortly after assuming office.
At the meeting, Umar congratulated the NUPRC on what he described as a seamless and credible 2025 licensing round and commended the commission for its improved enforcement of domestic crude supply to local refineries.
He, however, noted that pricing remained a critical consideration in implementing domestic supply arrangements, given that the Petroleum Industry Act (PIA) provides for transactions on a willing buyer, willing seller basis.
The NMDPRA chief executive also expressed support for the establishment of strategic petroleum reserves, saying they could strengthen Nigeria’s energy security and contribute to greater price stability.
The proposed swap mechanism is expected to form part of wider efforts by the two regulators to improve coordination across the upstream, midstream and downstream segments of the industry.