Nigeria Seeks Crude Swap Arrangement to Cut Supply Costs

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is exploring ways to cut supply costs and boost crude availability for domestic refineries. As part of this effort, the commission has proposed a domestic crude oil and gas swap arrangement.

The initiative aims to strengthen compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation while reducing the need for physical transportation of crude over long distances. NUPRC Chief Executive Oritsemeyiwa Eyesan explained that producers and refiners could optimise existing logistics and supply networks through a swap arrangement.

The proposed scheme would allow producers with export facilities to meet the obligations of producers closer to domestic refineries, eliminating unnecessary transportation costs. According to Eyesan, 'a swap arrangement enables 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 commission is consulting relevant stakeholders to develop the modalities for the scheme, which would involve the Gas Aggregation Company Nigeria Limited. Eyesan noted that discussions on a crude oil swap were still at an early stage and all necessary modalities would have to be agreed upon before implementation.