53.7m barrels of crude oil, condensate supplied to local refiners in Q2 — NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that 53.7 million barrels of crude oil and condensate were supplied to local refiners between April and June 2026 under the Domestic Crude Supply Obligation (DCSO). This marked a 97.4 per cent performance in the second quarter of 2026, according to the Commission's Q2 DCSO enforcement statistics released recently. The DCSO is administered and enforced by the NUPRC in accordance with Section 109 of the Petroleum Industry Act (PIA) 2021. The framework involves monthly consultations between crude oil producers and licensed domestic refineries, following which specific volumes of crude oil and condensate are allocated to producers for supply to local refineries. However, the framework operates on a "willing buyer, willing seller" basis, which influences the volume ultimately supplied and received. In April, the NUPRC allocated 18,127,638 barrels to producers. Producers offered 19,312,476 barrels to local refiners, while 20,879,381 barrels were eventually supplied, representing 114.9 per cent performance against the allocated volume. In May, the Commission allocated 18,778,392 barrels to producers. The producers offered 23,187,893 barrels to local refiners, but actual supplies stood at 14,228,865 barrels by the end of the month, representing 75.8 per cent compliance. For June, the NUPRC stated that it allocated 18,172,638 barrels to producers. The producers offered 26,835,119 barrels to refiners, while 18,606,026 barrels were eventually taken by the refiners, representing 102.4 per cent performance. The Commission said the improvement in DCSO performance coincided with increased domestic oil production and the signing of long-term crude supply agreements supported by bankable Sales and Purchase Agreements between producers and domestic refiners. Meanwhile, in May, the NUPRC announced that Nigeria’s domestic refineries received only 28.5 million barrels of crude oil in the first quarter of 2026 despite producers offering 68.7 million barrels. At the time, the NUPRC said a summary of the monthly allocations showed that 61.9 million barrels of crude oil were allocated to domestic refineries between January and March, while producers collectively offered a higher volume of 68.7 million barrels. “However, actual supply to local refineries was 28.5 million barrels, translating to a supply conversion rate of 36-46 per cent as of the end of the first quarter (Q1) 2026,” the statement said. The data for both Q1 and Q2 published so far highlight the persistent gap between crude oil volumes allocated, offered, and ultimately supplied to local refiners, amid government efforts to prioritise domestic refining and reduce reliance on imported petroleum products. At the refinery participation level, NUPRC said the statistics showed that the Dangote Refinery required 63 million barrels of crude oil during the second quarter. Producers, however, offered 68.1 million barrels to the refinery, representing 98 per cent of all crude volumes offered to local refiners during the period. The refinery eventually accepted 52.6 million barrels, representing 78 per cent of the volume offered to it. The NUPRC reaffirmed its commitment to achieving the Federal Government’s objective of energy sufficiency through effective implementation of the DCSO. The Commission said it would continue to leverage the framework established under the PIA 2021 to sustain recent gains in crude oil production and strengthen enforcement of the domestic crude supply obligation. The NUPRC has confirmed the commencement of consultations with relevant industry stakeholders on a domestic crude oil and gas swap arrangement aimed at cutting supply costs and ensuring more crude is available to Nigerian refineries. The initiative is expected to strengthen compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation while reducing the need to physically transport crude over long distances to meet supply requirements. The NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja. In a statement issued by the NUPRC Head of Media and Corporate Communications, Eniola Akinkuotu, Eyesan said the proposed arrangement would allow producers and refiners to optimise existing logistics and supply networks. She said the commission was consulting relevant stakeholders to develop the modalities for the scheme, which would also involve the Gas Aggregation Company Nigeria Limited. Eyesan explained that a swap arrangement would enable crude producers with export facilities to meet the obligations of producers closer to domestic refineries, eliminating the need to transport crude unnecessarily across the country. 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. The proposal comes against the backdrop of a significant improvement in crude deliveries to domestic refiners. NUPRC data showed that 53.7 million barrels of crude oil were supplied to local refiners between April and June 2026, representing 97.4 per cent performance under the DCSO during the second quarter. Despite the improvement, crude oil imports into the country have continued, with some refiners still relying on foreign crude to sustain operations. Refiners have repeatedly complained that some crude producers sell locally supplied crude at premium prices, making it more expensive for them to source Nigerian crude than imported alternatives and undermining the competitiveness of domestic refining. Eyesan said the persistence of imports had made it necessary for the commission to explore more efficient mechanisms for allocating and delivering domestic crude to refineries. She, however, noted that discussions on a crude oil swap were still at an early stage, stressing that all necessary modalities would have to be agreed upon before implementation. The NUPRC boss also pledged to strengthen collaboration with the NMDPRA to address challenges across the petroleum value chain. Responding, the NMDPRA Chief Executive, Rabiu Abdullahi Umar, congratulated the upstream commission on what he described as a seamless and credible 2025 licensing round. Umar also commended the NUPRC for improving enforcement of domestic crude supply to local refineries, saying the development was important to the growth of Nigeria’s refining industry. He noted, however, that pricing remained a major consideration in domestic crude transactions. According to him, although the Petroleum Industry Act provides for transactions to be conducted on a willing-buyer, willing-seller basis, pricing remained a critical factor in ensuring effective domestic supply. 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.