Nigeria Plans to Diversify Economy Away from Crude Oil Exports

The Nigerian government has announced plans to reduce the country's reliance on crude oil exports and increase domestic refining capacity. According to Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, Nigeria must progressively move away from an economy that primarily exports crude oil and instead capture more value through domestic refining, petrochemicals, and associated industrial activities.

The government has developed a Domestic Supply Obligation framework in consultation with the Nigerian National Petroleum Company Limited, the Oil Producers Trade Section, the Independent Petroleum Producers Group, CORAN, and other domestic refining interests. The framework aims to provide reliable access to crude for domestic refineries, ensuring energy security.

However, Chairman of the Crude Oil Refiners Association of Nigeria, Momoh Oyarekhua, warned that some domestic refineries are still struggling to access crude on commercially viable terms despite Nigeria's abundant resources. He called for the full institutionalisation of the naira-for-crude deal and stronger enforcement of the DCSO under Section 109 of the Petroleum Industry Act.

The government also faces a major crude supply challenge as domestic refinery demand increases, with some predicting that refineries could require more than 1.5 million barrels of crude per day in the medium term.