- Abridgement of accumulation to Dangote shameful, says FG, abbot blames low production
The abortion to accumulation awkward oil to calm refineries, including the multi-billion dollar Dangote Refinery, has adjourned the assembly of aesthetic petroleum articles at the facilities.
This is additionally as the 650,000 barrels per day Dangote refinery in Lagos absent the October assembly bump it had beforehand set.
The October assembly ambition absence fabricated it the additional time in 2023 that Dangote Refinery would accession hopes of Africa, abnormally Nigeria, of a accessible end to petrol importation. However, the abortion to activate assembly agency that Nigeria will abide to await on ammunition importation.
It was aggregate on Wednesday that amidst Nigeria’s connected imports of aesthetic petroleum products, its calm refineries that would accept helped clarify the bolt were actuality fatigued of awkward oil.
About bristles added modular refineries are accessible to arise the assembly of aesthetic petroleum articles but cannot aftermath the bolt because of the dearth of awkward oil, according to industry sources.
Also, industry sources declared that the Dangote Refinery in Lekki, Lagos, had yet to accept the appropriate volumes of awkward oil bare to aftermath aesthetic products.
On September 20, 2023, TFindwhosabi appear that the Dangote Petroleum Refinery was importing awkward oil and accepted its aboriginal burden in about two weeks, according to the Executive Director, Dangote Group, Devakumar Edwin.
The abode declared that admitting the Nigerian National Petroleum Aggregation Bound trades awkward oil on account of Nigeria, in an account with S&P Global Article Insights at the time, Edwin appear that the NNPCL had committed its awkward to added entities.
The Dangote refinery bang-up did not acknowledge the added entities accepting the oil company’s crude, but the NNPCL had beforehand appear in August that it had entered into a $3bn awkward oil-for-loan accord with African Export-Import Bank.
The accord accustomed the aggregation to agreement approaching oil assembly to the coffer as repayments for the loan.
Also, Edwin acicular out that the access of awkward by the Dangote refinery was temporary, as the close would accept accumulation from NNPCL from November.
Edwin went advanced to accompaniment that the close would activate the assembly of up to 370,000 barrels per day of awkward that would accord acceleration to Automotive Gas Oil, bargain alleged diesel, and jet ammunition in October 2023.
For petrol, the Dangote Group’s bang-up said the bulb would aftermath it by November 30, 2023.
He said, “Right now, we are accessible to accept crude. We are aloof cat-and-mouse for the aboriginal vessel. And so as anon as it comes in, we can start.”
However, admitting the affiance to activate assembly in October, there seemed to be no traces of agent adorning from the ability in October.
The ability was initially billed to activate adorning in August, as appear by the President of Dangote Group, Aliko Dangote, at the commencement of the Ibeju-Lekki ability in May.
“Your excellencies, acclaimed guests, our aboriginal artefact will be in the bazaar afore the end of July or alpha of August this year,” Dangote had said.
However, it was aggregate on Wednesday that the awkward oil accumulation bearings to the bulb had not improved, as the NNPCL was still award it boxy to accommodate the awkward oil appropriate for the Dangote refinery to arise the assembly of aesthetic products.
Sources at the Nigerian Upstream Petroleum Regulatory Commission and Federal Ministry of Petroleum Resources accepted this in Abuja on Wednesday.
“Officials from the Dangote Refinery visited the NUPRC afresh to accuse about the abridgement of awkward oil appropriate by the bulb and why it would be odd for the aggregation to be importing awkward back Nigeria produces the commodity,” one of the sources, who pleaded not to be alleged due to abridgement of authorisation, stated.
Efforts to get the acknowledgment of the Dangote refinery were unsuccessful, as two spokespersons for the close did not acknowledgment calls to their adaptable phones. They additionally did not acknowledge to argument letters beatific to them on the matter.
Although the Federal Government abhorrent the development on Nigeria’s low oil output, operators of calm refineries aloft apropos about the abridgement of feedstock (crude) for their refineries and how this was blockage the abandonment of these plants.
Operators of the modular refineries accepted on Wednesday that All-embracing Oil Companies adopted exporting the article to acquire dollars, to the damage of calm refiners.
The NUPRC had on Saturday appear that added calm refineries had issued apprehension to arise the assembly of aesthetic petroleum products.
It additionally appear its abode to accomplish calm awkward oil accumulation obligations that would ensure the availability of awkward to aboriginal refiners.
Senior admiral from the Federal Ministry of Petroleum Resources, the NUPRC, and the Awkward Oil Refinery Owners Affiliation of Nigeria added accepted that the cardinal of bounded refineries set to arise assembly was about five.
Modular refinery operators beneath the advocacy of CORAN appear that feedstock accumulation had remained a astringent bottleneck.
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They additionally told one of our correspondents that the three modular refineries currently in operation hardly accept able volumes of crude.
CORAN is a registered affiliation of modular and accepted refinery companies in Nigeria. Modular refineries are simplified refineries that crave decidedly beneath basic advance than acceptable all-encompassing refineries.
Modular refineries ready
Confirming the abode of calm refineries, the Secretary of CORAN, Olusegun Ilori, said about bristles modular refineries were ready.
It was aggregate that Aradel Holdings and OPAC modular refineries were amid the plants accessible to clarify crude. Operators of the plants requested not to name their refineries at the moment.
Ilori stated, “We accept a acceptable cardinal of our associates that are accessible to aftermath aesthetic petroleum products, but the aloft botheration attached them, which is endlessly their financiers, is the affair of affirmed feedstock.
“That is, breadth are they activity to get awkward oil to refine? The Petroleum Industry Act has come, and it states that there charge be a calm accumulation of awkward for those who appetite to refine.
“As I allege with you, we accept about bristles or six added companies advancing onboard and are accessible to activate production. This is abreast from the four modular refineries that are already producing. The four of them are adverse a bound accumulation of crude,” Ilori stated.
Duport Edo Refinery, Walter Smith Refinery, and Niger Delta Refinery are amid the modular refineries that are currently in operation. The accessories aftermath agent but in bound volumes due to bare feedstock.
On why calm refineries were actuality fatigued of crude, Ilori said, “It is because abounding of those bearing the awkward appetite to consign it to acquire dollars. Also, Nigeria still needs to accommodated the awkward oil assembly allocation accustomed by OPEC for export.
“So best awkward oil producers don’t appetite to advertise to bounded refiners because some are attributable banks and accept projected how to consign the article to bright their debts.”
He about said, “There is a annular from the NUPRC that is now actuality broadcast to oil companies, mandating awkward oil assembly firms to accord calm refineries a accurate allotment for bounded refining.”
This was beforehand accepted by the NUPRC on Saturday back it declared that it was demography accomplish to ensure the accouterment of awkward oil to calm refineries.
“As added clandestine refineries announce abode to arise assembly anon in Nigeria, the NUPRC is demography all the all-important accomplish aural the prescriptions of the Petroleum Industry Act (2021) to ensure able and constant accumulation of feedstock to operators,” the regulator stated, as it cautioned that there would be after-effects for alienated the process.
Low production
The Abbot of Accompaniment for Petroleum Resources (Oil), Heineken Lokpobiri, additionally accepted the abridgement of awkward to calm refiners, acquainted that Nigeria’s disability to accommodated its awkward oil assembly allocation accustomed by the Organisation of Petroleum Exporting Countries was the aloft attached factor.
The Organisation of Petroleum Exporting Countries in its World Oil Outlook, launched in Saudi Arabia this month, projected the enactment of new modular refineries in Nigeria would accompaniment the Dangote refinery to lift awkward oil sales in Africa.
The Outlook says Africa will see a medium-term beverage accommodation of 1.2 actor barrels circadian due to the accessible 650,000-capacity Dangote Refinery, which is projected to addition Nigeria’s capacity.
FG comments
In a articulation agenda beatific to one of our correspondents by the media abettor to the petroleum abbot (oil), on the issue, the abbot accepted that calm refineries were not accepting abundant crude, but declared that the government was alive adamantine to abode this.
“Today, we accept cases breadth we accept modular refineries that can clarify products, but they accept no awkward because our assembly is down. So if we don’t get the upstream right, the midstream and afterwards will additionally not be successful.
“So all our efforts, aboriginal of all, should ensure that we boldness the problems bedevilling the upstream sector. Back we came, we accept affianced the IOCs (international oil companies), and they told us their concerns.
“I’m abiding you heard a abbreviate while ago back the IOCs, NNPCL, actuality accommodating by the Ministry of Petroleum and bounded content, active an MoU that there should be timelines instead of acceptance the acknowledged aeon in the breadth to booty forever.
“And so the era of accomplishing article for two years, what could be done in one month, is gone. It is one of the innovations we accept brought to the sector,” Lokpobiri stated.
He, however, acclaimed that back the accepted administering came on board, “we are steadily accretion production.
“When we were affidavit in, the President told me, ‘Lokpobiri, the sole authorization is to go and ensure that you abound our production.’
“And how do we abound our production? If we don’t abound our production, which is upstream, the midstream and afterwards will additionally not be successful.”
The abbot said efforts were actuality agitated to ensure that the modular refineries get awkward oil and aftermath aesthetic white articles to accumulate the country wet.
Nigeria has been bearing far beneath the about 1.8 actor barrels per day of awkward oil assembly accustomed by OPEC. For instance, abstracts from the NUPRC showed that Nigeria’s awkward oil was 1.35mbpd in September 2023.
Findings showed that Nigeria’s awkward oil assembly (excluding condensates) was absolutely 1,346,562 barrels per day in September, college than the 1,181,133 bpd produced in August.
Data from the NUPRC added adumbrated that in January, February and March, the country’s oil outputs were 1,266,659bpd, 1,292,240bpd, and 1,266,737bpd, respectively.
In April, May, June and July, Nigeria produced 1,004,392bpd; 1,189,332bpd; 1,260,928bpd; and 1,089,089bpd, respectively. All the aloft awkward oil assembly abstracts showed that Nigeria’s achievement was still lower than the OPEC quota.
Marketers react
Meanwhile, oil marketers accept kicked adjoin the connected consign of awkward oil at the damage of bounded refineries able of bearing aesthetic petroleum articles mainly diesel.
The marketers asked the Federal Government to accommodate awkward to modular refineries to addition the bounded assembly of aesthetic products, affirmation that this would abate the pump amount of aesthetic articles back produced in ample volumes domestically.
The National Public Relations Officer of the Independent Petroleum Marketers Affiliation of Nigeria, Chinedu Ukadike, said the actualization of anatomic modular refineries was connected overdue.
He told our contributor that it was black to realise that modular refineries were actuality fatigued of awkward oil by IOCs and NNPCL, while the awkward oil producers exported the commodity.
“What is endlessly the government from giving modular refineries’ operators the appropriate abutment to abate our connected assurance on alien petroleum products? You cannot abide to abjure our calm refineries because you appetite dollars through awkward oil export.
“The actualization of anatomic modular refineries in their numbers in Nigeria is connected overdue. We cannot abide to acceptation articles back we can body or accept modular refineries to advice clarify some of our awkward oil. Now the subsidy on petrol has been reduced, let the modular refineries work.
“We apperceive that subsidies additionally contributed to their disability to appear on beck as required. Now that it is reduced, we apprehend the government to additionally accord them the appropriate abutment by bartering them with awkward oil so that abounding of them can alpha the adorning action in the abutting future,” Ukadike stated.
On whether modular refineries would still be applicable in the face of the Dangote Refinery which is estimated to aftermath 650,000 barrels of awkward daily, the Deputy Chairman, CORAN, Mrs Dolapo Kotun, replied in the acknowledging in a babble with our correspondent.
“Modular refineries are actual applicable and capital in accepting Nigeria’s activity needs now and in the future. They are localised in assorted sites in the Niger Delta area, and not aloof one area as is the case with the Dangote Refinery.
“Hence, these modular refineries will be able to anon accommodate world-grade affection aesthetic petroleum articles to the bounded markets about their altered refinery sites.
“Dangote’s accommodation abandoned cannot accommodated Nigeria’s present aesthetic products’ needs and we are not alike abiding back it will alpha bearing alike admitting it was ‘launched’,” Kotun stated.
She acclaimed that alike if the country was bearing balance capacity, “Who says we cannot consign the excess?
The ambition of domestically adorning our awkward oil is not to aloof accommodated demand, but to eventually beat present appeal so that the surplus will accomplish articles affordable and Nigeria can additionally become an consign hub for these products.”
Fuel importation
Nigeria has alien added than 5.52 billion litres of Premium Motor Spirit, bargain alleged petrol, back the abatement of the PMS subsidy on May 30, 2023. This is admitting the aerial adopted barter crisis beyond the country.
In September this year, the Group Chief Executive Officer, NNPCL, Mele Kyari, said the appeal for petrol alone by 30 per cent afterwards the subsidy on the article was removed.
He said Nigeria’s estimated ammunition burning alone from 66.7 actor litres circadian during the subsidy aeon to about 46 actor currently, implying that amid June and September, Nigeria alien over 5.52 billion litres of PMS.