The Federal Government has finally complied with the demands of domestic crude oil refiners and other stakeholders in the sector, permitting them to purchase crude oil in naira or dollars. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced this, revealing that the total crude oil and condensate reserves in Nigeria increased to 37.5 billion barrels as of January 1, 2024, with a life index of 68.01 years. The NUPRC, in collaboration with relevant stakeholders, developed a template guiding the activities for Domestic Crude Oil Supply Obligation, ensuring a seamless implementation and consistent supply of crude oil to domestic refineries.
The Chief Executive of NUPRC, Gbenga Komolafe, stated that the currency for the crude oil purchase would be either in naira or dollar, with naira transactions relieving the pressure on the country’s foreign exchange rate. He emphasized that the template had become effective as all necessary parties had signed up for it. The Petroleum Industry Act (PIA) aims to make the implementation of crude oil obligation easy for producers and refineries.
Nigeria has 25 licensed modular refineries with a combined capacity of producing 200,000 barrels of crude oil daily. However, these facilities faced the threat of shutting down operations due to the inability to access foreign exchange for crude oil purchase. The government’s decision to allow crude oil purchase in naira or dollars will ease the pressure on the exchange rate and potentially make refined products more accessible to consumers.
The country’s crude oil and condensate reserves have increased, as well as its gas reserves. The total crude oil and condensate reserves are now 37.5 billion barrels, with associated and non-associated gas reserves amounting to 209.26 trillion cubic feet. These reserves contribute to Nigeria’s abundant crude oil and gas production potential within a specified period.
