NUPRC Considers Crude Swap To Cut Local Refinery Supply Costs

The Nigerian Upstream Petroleum Regulatory Commission is considering a domestic crude oil and gas swap arrangement to reduce supply costs and make more crude available to local refineries.

The proposal is being discussed with industry players as part of efforts to improve compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation.

NUPRC Chief Executive Oritsemeyiwa Eyesan disclosed the plan during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja, according to Punch.

The idea is to let producers with export facilities meet domestic supply obligations by swapping crude or gas with refiners whose supply needs can be met more efficiently through existing logistics networks. NUPRC said the Gas Aggregation Company Nigeria Limited would also be involved in the proposed arrangement.

Vanguard reported that the commission is exploring crude swap deals to improve feedstock supply to local refineries. The proposal comes amid wider attention on local refining, including an earlier presidential assurance on refinery revival reported here.

If adopted, the swap model could reduce the need to move crude over long distances solely to satisfy local supply rules. The details are still under consultation, so the final structure and participating companies have not been announced.

Sources: Punch, Vanguard