NUPRC explores crude swap deals to boost supply to local refineries

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By Obas Esiedesa, Abuja

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Friday disclosed that it is consulting with stakeholders on introducing domestic crude oil and gas swap arrangements to reduce costs and increase the availability of petroleum products in the country.

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A statement by the Commission said its Chief Executive, Mrs. Oritsemeyiwa Eyesan, disclosed this during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja.

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Eyesan said the proposed swap arrangement, once finalised, would improve compliance with the Domestic Crude Supply Obligation (DCSO) and the Domestic Gas Supply Obligation. She added that the initiative would be coordinated with the Gas Aggregation Company Nigeria Limited (GACN).

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According to the latest NUPRC statistics, domestic crude supply to local refiners has improved significantly, with 53.7 million barrels supplied between April and June 2026, representing a 97.4 per cent performance in the second quarter.

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Despite the improvement, however, the importation of crude oil into the country persists, prompting the Commission to engage industry stakeholders on measures to address the challenge.

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Explaining how the proposed swap mechanism would work, Eyesan said producers with obligations close to export facilities could exchange supplies with operators whose obligations and facilities were closer to domestic offtakers.

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“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,” she said.

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“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.”

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Eyesan noted that discussions on crude oil swaps were still in their early stages, stressing that the Commission would continue consultations with relevant stakeholders before finalising the modalities.

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She also pledged to deepen collaboration between the NUPRC and NMDPRA in the overall interest of Nigeria’s oil and gas sector.
In his remarks, the Chief Executive of the NMDPRA, Mallam Rabiu Abdullahi Umar, congratulated the NUPRC on what he described as a seamless and credible 2025 licensing round.

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Umar also commended the Commission for improving enforcement of the domestic crude supply obligation to local refiners.

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He noted that while the Petroleum Industry Act provides for transactions on a willing-buyer, willing-seller basis, pricing remained a major consideration in ensuring effective domestic supply.

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The NMDPRA chief therefore expressed support for the creation of strategic reserves, saying they would strengthen Nigeria’s energy security and contribute to price stability.

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