NUPRC Targets More Local Crude For Refiners With New Trading Platform

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is moving to increase the volume of crude oil supplied to domestic refineries by introducing a compliance trading platform for producers.

The commission’s chief executive, Oritsemeyiwa Eyesan, said the new system would allow companies that exceed their local supply obligations to trade certificates with those focused on exports, in a bid to strengthen enforcement of the Domestic Crude Supply Obligation.

“Companies often sell to foreign buyers offering better terms,” Eyesan said in an interview with S&P Global, acknowledging that existing rules have not always been followed in practice. The planned platform is designed to create market incentives for meeting local feedstock requirements.

Under current regulations, producers must deliver fixed volumes of crude to Nigerian refineries. However, the regulator admitted that compliance has been uneven, with some operators prioritising higher-paying overseas customers.

Eyesan linked the initiative to broader government ambitions for the downstream sector, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s goal of directing all of Nigeria’s crude output to local refining by 2030.

The 700,000-barrel-per-day Dangote refinery, which began operations in 2024, already sources about 77 per cent of its feedstock from Nigerian crude, according to S&P Global’s Commodities at Sea data. With a planned expansion that could double its capacity, the facility is expected to process almost all of Nigeria’s current crude output, excluding volumes earmarked for new government-backed refining projects.

Despite this, Eyesan said Dangote should retain the right to source crude based purely on economics, adding that she would not fault the refiner for bypassing domestic grades in favour of cheaper alternatives when it makes commercial sense.

The trading platform forms part of a wider push to revive Nigeria’s oil sector, which has seen production stagnate at around 1.5 million barrels per day and fail to exceed 2 million barrels in the past 12 years. NUPRC blames maturing assets, pipeline vandalism and years of underinvestment for the decline.

To support higher output, the regulator also announced plans to hold oil licensing rounds at least once a year, and possibly twice a year, with each bid round expected to add between 300,000 and 600,000 barrels per day of new production. The commission is targeting a turnaround time of six to seven months for future licensing processes.

Alongside faster licensing, NUPRC has introduced “drill-or-drop” provisions to discourage passive ownership of oil blocks. Shallow-water licenses were awarded for three years with an option to extend, while deepwater and frontier concessions were granted for five years in the 2025 round.

The regulator is also seeking $30 billion to $50 billion in new investment for 22 deepwater projects by 2030, supported by fresh tax incentives, as it works towards a national crude production target of 3 million barrels per day within the next four years.