Stakeholders in Nigeria's refining sector have raised concerns that the country's current crude oil production cannot support the increasing demand for feedstock by local refineries. This issue was a major topic at the 3rd Nigeria Oil Refining Summit (NORS) 2026, with the theme "Refining For Value: Linking Upstream Supply To Downstream Demand". The summit was held in Lagos.
According to Adegbite Falade, Chairman of the Independent Petroleum Producers Group (IPPG) and Managing Director of Aradel Plc, Nigeria's domestic refineries may require over 1.5 million barrels of crude per day in the medium term. This forecast depends on rehabilitation progress, expansion activities, operating rates, and the commissioning of more modular refineries.
Nigeria's current liquids output stands at 1.68 million barrels a day (BPD) as of August 2026, based on the Nigerian Upstream Petroleum Regulatory Commission's (NUPRC) August monthly production report. Falade noted that while the recovery in production is encouraging compared to previous years, it is not yet sufficient to meet the projected demand.
If domestic refinery demand rises to 1.5 million BPD and crude production remains around 1.6 million BPD, the production system will face a narrow margin for existing export commitments, government revenue requirements, and other factors. Falade emphasized that the upstream industry must be at the center of the refining conversation to address these challenges.
Nigeria's crude oil and condensate reserves stand at approximately 37.01 billion barrels, while natural gas reserves are about 215.19 trillion cubic feet (TCF), according to NUPRC's published reserves position as of January 1, 2026. The challenge, Falade said, is converting these reserves into production and secure supply for domestic refining competitiveness.
This conversion requires capital, fiscal stability, security, infrastructure, regulatory certainty, bankable commercial terms, and a shared understanding that the upstream and downstream industries are an integrated value chain. Falade commended regulatory bodies, producers, and refiners for progress made in implementing the Direct Sale of Crude Oil (DSCO) framework under the Petroleum Industry Act.
Recent data from NUPRC shows that DSCO compliance rose to approximately 97.4 percent in Q2 2026 from 41 percent in Q1 2026. The IPPG, comprising 34 indigenous Exploration and Production companies, now accounts for over half of Nigeria's total oil and gas production, playing a growing role in the petroleum industry.
Key points
- Nigeria's crude oil production must increase to meet local refining demand
- The country's current liquids output stands at 1.68 million barrels a day
- Stakeholders emphasize the need for the upstream industry to be at the center of the refining conversation
