The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is consulting oil and gas industry stakeholders on a domestic crude oil and gas swap arrangement designed to cut supply costs and improve access to feedstock for Nigerian refineries.
The proposed scheme is expected to improve compliance with the Domestic Crude Supply Obligation (DCSO) and Domestic Gas Supply Obligation (DGSO), while reducing the cost and logistical burden of moving crude across long distances.
NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed the plan during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja on Thursday.
According to a statement issued on Friday, August 14, by NUPRC Head of Media and Corporate Communications, Eniola Akinkuotu, the arrangement would allow crude producers and refiners to make better use of existing supply and transportation networks.
Eyesan said consultations were ongoing to determine how the proposed system would work, with the Gas Aggregation Company Nigeria Limited also expected to participate.
Under the proposed arrangement, a producer located near an export terminal could effectively meet the domestic supply obligation of another producer located closer to a Nigerian refinery.
The statement read, “The Nigerian Upstream Petroleum Regulatory Commission is consulting widely with stakeholders in the industry on the idea of a domestic crude oil and gas swap that would reduce cost and increase availability of products in the country.
“Once all the modalities are finalised, there would be improved compliance with the Domestic Crude Supply Obligation and the Domestic Gas Supply Obligation.
“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 said.
The proposal comes as the volume of crude supplied to domestic refiners has improved significantly.
NUPRC data showed that local refiners received 53.7 million barrels of crude between April and June 2026, representing 97.4 per cent performance under the DCSO during the second quarter.
However, some Nigerian refineries continue to import crude despite the improved domestic supply figures.
Local refiners have repeatedly raised concerns about the pricing of Nigerian crude, with some producers allegedly selling domestic supplies at premium prices.
Refiners argue that such pricing can make imported crude cheaper and undermine the competitiveness of domestic refining.
Eyesan said the continued reliance on imports underscored the need to develop more efficient ways of matching domestic crude obligations with refinery demand.
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She stressed, however, that the proposed swap was still being developed and would not be implemented until the necessary arrangements had been agreed upon.
Eyesan also pledged closer cooperation between the NUPRC and NMDPRA in addressing challenges across Nigeria’s petroleum value chain.
Responding, NMDPRA Chief Executive, Rabiu Abdullahi Umar, congratulated the upstream regulator on what he described as a seamless and credible 2025 licensing round.
Umar also praised the NUPRC for strengthening enforcement of domestic crude supply to Nigerian refineries, describing the development as important to the expansion of the country’s refining industry.
He nevertheless pointed to crude pricing as a major issue in domestic transactions.
According to him, while the Petroleum Industry Act provides for transactions to operate on a willing-buyer, willing-seller basis, the price at which crude is sold remains critical to the economic viability of domestic refineries.
The NMDPRA also expressed support for establishing strategic petroleum reserves, saying the reserves could improve Nigeria’s energy security and help promote greater price stability.
The proposed swap comes as Nigeria’s refining landscape expands, with the Dangote Petroleum Refinery and other private facilities increasing their operations.
For regulators, the challenge is increasingly shifting from simply expanding refining capacity to ensuring that domestic refineries can consistently obtain sufficient Nigerian crude at prices that allow them to compete with imported feedstock.