Juliet Ezeh
Nigeria’s upstream regulator has intensified efforts to resolve the country’s lingering crude supply challenges by urging domestic refinery operators to move beyond dependence on third-party crude suppliers and consider acquiring oil blocks in upcoming licensing rounds.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said such a shift would not only guarantee more stable feedstock for local refineries but also deepen indigenous participation in the upstream segment of the oil and gas industry.
The appeal was made by the Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, during a courtesy visit by members of the Crude Oil Refinery Owners Association of Nigeria (CORAN) to the NUPRC headquarters in Abuja. The meeting focused on how to strengthen Nigeria’s domestic refining capacity and address persistent challenges affecting crude availability.
Push for upstream participation
According to discussions at the meeting, the regulator believes that one of the most sustainable ways to address recurring supply gaps is for refinery operators to integrate vertically by acquiring upstream assets.
Mrs Eyesan explained that when refiners participate in oil block ownership, they are better positioned to secure crude directly, reduce exposure to market volatility, and build commercially viable supply arrangements that support long-term operations.
She noted that Nigeria still holds significant crude oil reserves capable of meeting both export obligations and domestic consumption needs, stressing that the challenge lies more in infrastructure and coordination than in availability.
“Encouraging indigenous refiners to participate in upstream asset ownership would create more stable and commercially viable crude supply arrangements while also deepening local participation across the petroleum value chain,” she said.
Her remarks reflect a growing regulatory push to restructure Nigeria’s oil value chain in a way that reduces reliance on intermediaries and strengthens domestic capacity.
Call for long-term supply agreements
Beyond upstream participation, the NUPRC chief also advised refinery operators to enter into long-term crude supply contracts with producers as an immediate strategy to stabilize feedstock access.
She explained that such agreements would help refiners improve operational planning, reduce uncertainty in procurement, and achieve more predictable pricing structures in a volatile global oil market.
Industry analysts have long argued that Nigeria’s refining sector suffers from inconsistent crude allocation frameworks, often forcing local refineries to compete with export markets or rely on ad hoc supply arrangements that undermine efficiency.
Mrs Eyesan’s position suggests a regulatory preference for structured, contract-based supply systems that can provide clarity and reduce friction between producers and refiners.
Infrastructure bottlenecks remain a challenge
While emphasizing reform efforts, the NUPRC boss also acknowledged that Nigeria’s midstream and logistics infrastructure continues to pose significant challenges to efficient crude delivery.
She pointed to persistent bottlenecks including inadequate pipeline networks, evacuation constraints, storage limitations, and inefficiencies in marine logistics.
According to her, these gaps increase operational costs and create unnecessary delays in moving crude from production sites to refineries, ultimately affecting domestic refining output.
Stakeholders at the meeting agreed that addressing these infrastructure issues will require coordinated investment from both public and private sector players, as well as stronger regulatory enforcement to ensure asset protection and operational efficiency.
CORAN’s position on supply stability
Members of the Crude Oil Refinery Owners Association of Nigeria commended the NUPRC for its ongoing reforms and its commitment to promoting domestic refining.
However, they reiterated that policy intent must be matched with effective implementation, particularly in ensuring consistent crude supply to local refineries.
CORAN representatives stressed that many modular and private refineries in Nigeria are still operating below capacity due to irregular access to feedstock, despite having installed processing capabilities ready for production.
They argued that stabilizing crude supply would immediately translate into higher domestic fuel production, reduced reliance on imported petroleum products, and improved energy security.
Broader economic implications
Industry stakeholders have repeatedly highlighted the strategic importance of improving access to crude for local refineries. They argue that a functional domestic refining system could significantly reduce Nigeria’s dependence on imported fuel products, which currently consumes a large share of foreign exchange earnings.
A stronger refining sector is also expected to generate employment opportunities, stimulate industrial growth, and enhance value addition within the petroleum sector.
Economists note that Nigeria’s long-standing paradox being a major crude oil producer yet heavily reliant on imported refined products can only be addressed through sustained investment in refining infrastructure and improved upstream-downstream integration.
Regulatory reform and industry engagement
The meeting between the NUPRC and CORAN is part of a broader series of engagements aimed at unlocking the potential of Nigeria’s downstream petroleum sector.
In recent years, the regulator has introduced several policy reforms targeted at improving transparency in crude allocation, encouraging domestic refining, and attracting investment into upstream development.
These reforms are also designed to align with the goals of the Petroleum Industry Act, which seeks to modernize Nigeria’s oil and gas governance framework and promote efficiency across the value chain.
According to CORAN spokesperson Eche Idoko, the dialogue reflects a shared understanding between regulators and private operators that collaboration is essential to resolving structural challenges in the sector.
He noted that both sides agreed on the need for sustained engagement to ensure that policy frameworks translate into tangible improvements in refinery operations and crude supply reliability.
A shift toward integration
The latest position by the NUPRC signals a gradual shift toward deeper integration of Nigeria’s oil and gas value chain, where downstream operators are encouraged to participate more actively in upstream activities.
If implemented effectively, the strategy could reduce supply disruptions, improve investment certainty, and strengthen Nigeria’s refining ecosystem.
However, analysts caution that such a transition will require significant capital investment, regulatory clarity, and stable policy direction to attract participation from refinery operators who may lack upstream experience.
For now, the conversation marks another step in Nigeria’s ongoing effort to rebuild its domestic refining capacity and reduce its long-standing dependence on imported petroleum products.