|
Getting your Trinity Audio player ready...
|
Nigerian Refineries Took In Over 127 Million Barrels of Local Crude in Nine Months, but Third-Quarter Deliveries Fell Short of Target
Nigeria’s upstream regulator says domestic refiners received more than 127 million barrels of Nigerian crude and condensate between January and September, a figure that shows how much more local oil is reaching local plants, and also where deliveries are still falling short.
Oritsemeyiwa Eyesan, chief executive of the Nigerian Upstream Petroleum Regulatory Commission, disclosed the numbers on Monday, October 26, at the OTL Africa Downstream Energy Week in Lagos. She was represented by Prosper Omonedo, the commission’s assistant director for operations. According to the statement, the commission engaged producers and refiners to resolve supply disruptions, and deliveries then reached 53.7 million barrels in the second quarter and 45.1 million barrels in the third quarter, equal to 97.4 percent and 76.2 percent of what was expected. Taken together, more than 127 million barrels went to Nigerian refineries in the first three quarters, the commission said.
The quarterly split shows a gap. A drop in performance from 97.4 percent to 76.2 percent means the third quarter fell about 21 percentage points short of the second. By my calculation from the reported figures, third-quarter obligations were about 59 million barrels, so roughly 14 million barrels of expected supply were not delivered, though the commission did not publish that number or explain the cause. First-quarter volumes were not stated separately, but subtracting the second and third quarters from the nine-month total implies about 28 million barrels, again a derived estimate. Across the nine months, the volume equals roughly 465,000 barrels a day, according to one analysis, and a check of 127 million divided by 273 days gives the same figure.
What rule is behind the allocation? Under Section 109 of the Petroleum Industry Act 2021, the commission allocates crude to domestic refineries before any is exported, a mechanism known as the Domestic Crude Supply Obligation. The regulator describes the nine-month total as evidence the obligation is being implemented better, after disputes between oil producers and refiners over price, grades and delivery left some plants short of feedstock earlier. The figure covers all domestic refineries, not only the 700,000-barrel-a-day Dangote plant, and it includes condensate.
The commission also outlined a fix for logistics. It is consulting producers, refiners and other stakeholders on a domestic crude swap framework, under which a refiner would receive crude from the nearest suitable production or export point instead of hauling an allocated grade long distances. The commission estimates that could cut about $3 to $4 from the cost of each barrel, a saving that would matter at the scale of hundreds of thousands of barrels a day. It added that it is working with the downstream regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, to match refinery demand with crude supply planning, and reaffirmed its commitment to the Domestic Gas Delivery Obligation.
The supply push sits beside other upstream goals. Crude production averaged 1.717 million barrels a day in September, including condensate, and crude alone averaged 1.53 million, the fifth straight month at or above Nigeria’s OPEC quota. Eyesan also said the commission is enforcing its drill-or-drop principle to discourage speculative holding of licences, and that 22 recent awardees are expected to add at least 250,000 barrels a day within five years.
Context matters in reading these numbers. Government officials have argued that much of Nigeria’s output is already committed to partners and cost recovery, which limits how much crude can be redirected to local refineries, and the Dangote refinery has also bought American grades to fill gaps. The 127 million barrels therefore show progress without proving that supply is sufficient, and the third-quarter shortfall is a reminder that allocation on paper does not always become delivery.
What to watch next: whether fourth-quarter deliveries return toward the 97 percent seen in the second quarter, whether the swap framework is finalised and what price and logistics rules it sets, and whether the commission publishes a breakdown by refinery so the public can see who receives what.
