upstream regulator has advised local refinery operators to invest directly in oil blocks as a long-term solution to the persistent crude supply shortages constraining domestic refining capacity. The recommendation, made by the Nigerian Upstream Petroleum Regulatory Commission, reflects growing concern over the mismatch between Nigeria’s expanding refining capacity and the availability of reliable feedstock for local plants. Speaking during a meeting with the Crude Oil Refinery Owners Association of Nigeria in Abuja, the commission said upstream asset ownership would give refiners greater control over crude supply, improve operational certainty and reduce exposure to disruptions in the domestic market. For Nigeria’s refining sector, this is a strategic shift. Refiners that own or hold equity in producing assets can secure dedicated crude streams, negotiate more favourable commercial terms and better manage supply risks. It is a model widely used in more mature energy markets, where vertical integration helps stabilise refinery operations. The push comes at a critical time. Nigeria is ramping up local refining capacity, led by large-scale investments such as the Dangote Refinery and the gradual rehabilitation of state-owned refineries. Yet feedstock availability remains one of the sector’s biggest bottlenecks. While Nigeria produces sufficient crude to meet domestic refining needs, supply to local plants has often been hampered by pipeline constraints, evacuation challenges, storage shortfalls and marine logistics limitations. These infrastructure gaps continue to disrupt the efficient movement of crude from wellhead to refinery gate. The commission also encouraged refiners to secure long-term crude supply agreements with producers. Such contracts would provide greater pricing visibility, improve planning and help shield refiners from spot market volatility. Industry operators have repeatedly stressed that consistent crude access is essential to reducing Nigeria’s reliance on imported petroleum products. A stronger domestic refining base would enhance energy security, conserve foreign exchange and create jobs across the value chain.
NUPRC To Refiners: Acquire Oil Blocks For Crude Security
Nigeria’s upstream regulator has advised local refinery operators to invest directly in oil blocks as a long-term solution to the persistent crude supply shortages constraining domestic refining capacity.
The recommendation, made by the Nigerian Upstream Petroleum Regulatory Commission, reflects growing concern over the mismatch between Nigeria’s expanding refining capacity and the availability of reliable feedstock for local plants.
Speaking during a meeting with the Crude Oil Refinery Owners Association of Nigeria in Abuja, the commission said upstream asset ownership would give refiners greater control over crude supply, improve operational certainty and reduce exposure to disruptions in the domestic market.
For Nigeria’s refining sector, this is a strategic shift. Refiners that own or hold equity in producing assets can secure dedicated crude streams, negotiate more favourable commercial terms and better manage supply risks. It is a model widely used in more mature energy markets, where vertical integration helps stabilise refinery operations.
The push comes at a critical time. Nigeria is ramping up local refining capacity, led by large-scale investments such as the Dangote Refinery and the gradual rehabilitation of state-owned refineries. Yet feedstock availability remains one of the sector’s biggest bottlenecks.
While Nigeria produces sufficient crude to meet domestic refining needs, supply to local plants has often been hampered by pipeline constraints, evacuation challenges, storage shortfalls and marine logistics limitations. These infrastructure gaps continue to disrupt the efficient movement of crude from wellhead to refinery gate.
The commission also encouraged refiners to secure long-term crude supply agreements with producers. Such contracts would provide greater pricing visibility, improve planning and help shield refiners from spot market volatility.
Industry operators have repeatedly stressed that consistent crude access is essential to reducing Nigeria’s reliance on imported petroleum products. A stronger domestic refining base would enhance energy security, conserve foreign exchange and create jobs across the value chain.
Ultimately, the regulator’s message is clear: expanding refining capacity without securing upstream supply is an incomplete strategy. For Nigeria to fully realise the benefits of its refining ambitions, stronger integration between the upstream and downstream segments will be essential.
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