NUPRC Eyes Domestic Crude Swap, Aims For $4/b Cost Reduction For Local Refiners

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is considering a domestic crude swap framework that it says could cut refiners’ costs by an estimated $3 to $4 per barrel.

The commission chief executive,  Oritsemeyiwa Eyesan, disclosed this on Monday in Lagos at the OTL Africa Downstream Energy Week 2026.

Speaking on the theme, “Secure Energy, Shared Prosperity,” she was represented by the Assistant Director, Operations, Mr. Prosper Omonedo.

Eyesan said the NUPRC is consulting producers, refiners and other stakeholders on the framework.

“Under it, a refiner could receive crude from the nearest suitable production or export point instead of moving an allocated grade over long distances, which could take an estimated three to four dollars off the cost of every barrel,” she said.

Under Section 109 of the Petroleum Industry Act 2021, the NUPRC allocates crude oil to domestic refineries before export.

The proposal followed improved crude deliveries to domestic refineries under the Domestic Crude Supply Obligation (DCSO). Eyesan said the NUPRC’s intervention helped after commercial disagreements between producers and refiners affected supplies in the first quarter.

“We engaged producers and refiners, and in the second and third quarters, 53.7 and 45.1 million barrels of crude oil and condensate were supplied to domestic refineries, an overall performance of 97.4 and 76.2 per cent, respectively. From Q1–Q3 of 2026, more than 127 million barrels of Nigerian crude went to Nigerian refineries,” she said.

On production, Eyesan said Nigeria recorded an average of 1.717 million barrels per day of crude oil and condensate in September, a 2.34 per cent increase over August.

Crude oil production alone averaged 1.53 million barrels per day, marking the fifth consecutive month the industry met or exceeded its quota.

She attributed the improvement to better asset integrity, enhanced security of evacuation infrastructure, stronger collaboration with operators and sustained regulatory efforts to restore shut-in production.

On the 2026 Licensing Round, Eyesan said the 40 blocks on offer would go through a transparent evaluation process, with published criteria and mandatory disclosure of beneficial ownership.

She added that the Commission was enforcing the drill-or-drop principle to discourage speculative holding of licences. She noted that 22 recent awardees were expected to contribute at least 250,000 barrels per day within five years.

Eyesan reaffirmed the Commission’s commitment to meeting the Domestic Gas Delivery Obligation. She said the NUPRC would work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to align refinery demand with crude supply planning, so that upstream gains translate into tangible benefits for households, industries and power generation.