Nigeria explores crude swap deals to boost local refinery supply

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively seeking solutions to enhance the availability of petroleum products within the country. The commission is consulting with industry stakeholders on a new domestic crude oil and gas swap arrangement designed to lower costs and boost local refinery supply.

NUPRC Chief Executive Mrs. Oritsemeyiwa Eyesan explained that the proposed swap mechanism would allow producers with obligations near export facilities to exchange supplies with operators whose facilities are closer to domestic buyers. This "netting off" approach aims to streamline logistics and improve compliance with the Domestic Crude Supply Obligation (DCSO) and Domestic Gas Supply Obligation.

Recent NUPRC statistics show a significant improvement in domestic crude supply to local refiners, with 53.7 million barrels supplied between April and June 2026, achieving 97.4% performance. However, crude oil importation continues, prompting the commission to explore further measures. Discussions are in early stages, with further consultations planned before finalizing the modalities. NUPRC also pledged to deepen collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

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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. 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.