NUPRC to Launch Crude Certificate Trading Platform for Producers

By Adedapo Adesanya

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is set to introduce a compliance trading platform that will allow crude oil producers to trade supply certificates as the regulator moves to increase crude deliveries to domestic refineries.

NUPRC’s chief executive, Mrs Oritsemeyiwa Eyesan, disclosed this in an interview with S&P Global, saying the proposed system would enable producers that exceed their Domestic Crude Supply Obligation (DCSO) to trade certificates with companies focused on exports.

The initiative is designed to strengthen compliance with domestic supply requirements while creating market-based incentives for producers to meet local crude demand.

“Companies often sell to foreign buyers offering better terms,” Mrs Eyesan said, acknowledging that compliance with existing domestic supply rules has been uneven.

Under the current regulations, crude producers are required to supply specified volumes to Nigerian refineries. However, some operators have prioritised overseas buyers offering more attractive commercial terms.

Mrs Eyesan said the proposed trading platform would address the compliance gap by giving producers greater flexibility while ensuring that domestic refineries have access to required crude supplies.

The move is part of broader efforts to support the development of Nigeria’s downstream petroleum sector, amid government plans to increase domestic refining and reduce reliance on imported petroleum products.

The 700,000-barrel-per-day Dangote refinery, which commenced operations in 2024, currently sources about 77 per cent of its feedstock from Nigerian crude, according to S&P Global’s Commodities at Sea data.

The refinery could significantly increase its demand for domestic crude if its planned expansion doubles its capacity. However, Mrs Eyesan said Dangote should retain the right to source crude based on commercial considerations, including the cost and availability of different grades.

“I would not begrudge Dangote if [it’s] not picking up domestic crude,” she said, “It might not be prudent to procure those grades as opposed to cheaper alternatives.”

Meanwhile, the NUPRC is seeking to reverse the decline in Nigeria’s crude oil production, which has remained around 1.5 million barrels per day and has not exceeded 2 million bpd in the past 12 years.

The commission attributed the production challenges to factors including maturing oil assets, pipeline vandalism and prolonged underinvestment in the upstream sector.

To boost production, the regulator plans to conduct oil licensing rounds at least once a year and potentially twice annually. Each licensing round is expected to attract between 300,000 and 600,000 barrels per day of additional production capacity.

“These will be annual, if possible, even twice-annual events. At a minimum, we’ll be going to the market on an annual basis,” she told the platform.

The NUPRC is also targeting a six-to-seven-month turnaround time for future licensing processes and has introduced “drill-or-drop” provisions aimed at discouraging passive ownership of oil blocks.

Under the provisions, shallow-water licences awarded in the 2025 licensing round were granted for three years with an option for extension, while deepwater and frontier concessions were awarded for five years.

The commission is targeting between $30 billion and $50 billion in new investment for 22 deepwater projects by 2030, supported by new tax incentives.

The investment drive is part of the regulator’s efforts to raise Nigeria’s crude production to 3 million barrels per day within the next four years.