Nigeria's Crude Producers Offer More Than Refineries Can Handle

Nigeria's crude oil producers have offered domestic refiners more crude than they can handle, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Between January and August this year, producers offered a total of 182 million barrels of crude against domestic refiners' declared requirement of 154.6 million barrels.

This represents an equivalent volume of 118% of the refiners' declared requirement. However, only 112 million barrels have been transacted so far.

NUPRC's chief executive officer, Oritsemuyiwa Eyesan, attributed the gap to various factors including pricing, payment security, crude grade, and delivery timing. Producers are concerned about payment security, reliability of offtake, and existing export commitments, while refiners are focused on crude availability, delivery schedules, and pricing.

To address this challenge, NUPRC is working on a domestic crude swap arrangement that will allow producers to swap their domestic supply obligations with other producers. This will help lower logistics costs and delivery times while improving crude availability and compliance.