Hold NNPCL Responsible If Port Harcourt, Warri Refineries Fail To Begin Operation By Dec – Minister 

• Nigeria May Import 110, 000 Crude Oil From Venezuela, Saudi Arabia 

NIGERIA’S Minister of State Petroleum (Oil), Heineken Lokpobiri has asked Nigerians to hold 

the Nigerian National Petroleum Company Limited (NNPCL) responsible if the deadline for rehabilitating Port Harcourt and Warri crude oil refineries is not met.

Speaking with journalists after the recent Ministers’ Retreat in Abuja, the Minister emphasized that NNPCL assured him that phase 1 of the refinery rehabilitation work would be completed, as part of the President’s directive. He explained that the rehabilitation of the refineries was initiated by the previous administration and that he had been briefed on the progress of work. 

“Yes, the refinery’s rehabilitation, if you remember, was started by the previous administration and as part of the President’s directive. I have gone around all the refineries, and from what they have briefed me, Port Harcourt has three phases.

“So Phase 1 will be ready by the end of this year. I am not the one who is directly in charge of rehabilitation; it is the NNPCL, and they have told me, and I am holding them accountable. 

“For the Warri Refinery, they said Phase 1 will be ready by the end of the year. Phases 2 and 3 in Port Harcourt will be ready next year, and the whole Kaduna Refinery will be ready by the end of next year.

“That is what they said, and I am holding them accountable for their words. I believe that those refineries if we can achieve some level of rehabilitation by the end of this year, will also improve our domestic refining capacity. 

“That’s why I said unless we produce sufficient quantities, even if the refineries are rehabilitated, there will be no feedstock. So, my challenge is to ramp up production to see how we can feed not only the big refineries but also the modular ones. These are the real employers of labour, and they will do the magic,” he said.

Meanwhile, there are strong indications that the NNPCL may begin importation of 110, 000 barrels of crude oil per day from Venezuela or Saudi Arabia to operate the Kaduna Refinery due to come on stream next year.

Also, the Dangote, BUA and other refineries may be forced to import about 1.322 million barrels of crude oil per day amid oil production challenges in Nigeria, existing contracts on crude oil swap as well as other commercial issues.

Currently, the Dangote Refinery, with 650,000 barrels per day refining capacity, is relying on imported crude, while the BUA Refinery within the South-South region will need about 200,000 barrels per day of crude oil from next year. 

NNPCL is also looking to bring back its 445,000 barrels per day refineries between next month and next year, while the existing modular refineries will require 27,000 barrels per day.

Nigeria has been struggling to sustain its crude oil production. The country currently records a 113.52 million barrels shortfall in meeting the Organisation of Petroleum Exporting Countries (OPEC) output quota. That loss alone is about $8.9 billion in the first seven months of 2023.

While OPEC’s production quota allocated to Nigeria stands at about 1.742 million barrels per day, figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that output has been averaging about 1.1 million barrels.

The NNPCL has current obligations to supply crude to contractors, but the recent borrowing of $3 billion from Afreximbank would drastically reduce the volume of crude the national oil company could provide to the local market.

The Nigerian Upstream Regulatory Commission is currently dragging oil producers in an attempt to enforce Section 109 of the Petroleum Industry Act (PIA), which introduced Domestic Crude Supply Obligation (DCSO) to Nigeria’s oil industry to ensure domestic refineries are not starved of crude oil supply.

Although the regulator is threatening a fine of $10,000, a penalty of 50 per cent of their fiscal price per barrel of crude oil not delivered to refineries and denial of export permits, many of the crude oil producers are worried over commercial issues that may come up in such a transaction.

Eighteen-Eleven Media