BREAKING NEWS, Oil & Gas
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The Nigerian National Petroleum Corporation says the three refineries in the country are performing below 20 percent of installed capacity
| By Anayo Ezugwu | Nov 21, 2016 @ 01:00 GMT |
THE news about the performance of refineries in Nigeria is bad. The latest financial and operations report of the Nigerian National Petroleum Corporation, NNPC, shows that the consolidated performance of Nigeria’s three refineries in Warri, Kaduna and Port Harcourt is below 20 percent.
An analysis of the refineries performance in August 2016 as released by the NNPC on its website showed that the precise consolidated capacity utilisation of the three refineries was 19.9 percent.
This, however, was an improvement over 6.74 percent that was recorded in July 2016. The three refineries are the Warri Refining and Petrochemical Company, the Kaduna Refining and Petrochemical Company, and the Port Harcourt Refining Company.
The report further stated that the consolidated revenue losses of the three facilities dropped from the 5.13 percent in July to 3.23 percent in August. On the individual performance of the refineries in August, the NNPC said the capacity utilisation of the WRPC was 14.28 percent of crude oil plant capacity of 125,000 barrels per day.
The capacity utilisation of the KRPC and the PHRC was put at 18.78 percent and 19.52 percent, while their plant capacity was 210,000bpd and 110,000bpd, respectively. “The total crude produced by the three local refineries for the month of August was 359,081 metric tonnes (2.63 million barrels), compared to crude processed in July of 126,756MT (929,275 barrels). For the month of August, the three refineries produced 328,314MT of finished petroleum products out of 356,081MT of crude processed.”
The NNPC, however, explained that the improved capacity utilisation of the facilities was due to the success achieved by the domestic refineries. “For the first time, in several months, the three refineries operated concurrently despite crude pipeline vandalism in the Niger Delta region. However, the three refineries continue to operate at minimal capacity.”
With the drastic drop in production of the refineries, Ibe Kachikwu, minister of state for petroleum, has charged the International Oil Companies, IOCs to start refining their products locally. Kachikwu in an interview with Financial Times said the international oil company, IOCs, operating in Nigeria must stop treating the country like a trading colony and instead invest in the energy sector if they want to retain access to the nation’s resources. Such investment, according to him, includes crude refining locally.
Some of the world’s biggest independent oil traders, the minister said, had benefited for years from exporting Nigeria’s crude and selling to the country refined petroleum products, without putting money into developing of the sector. “We have to get selfish on this. If you have been selling to me (refined) products for six years and you can’t put a foothold in the country, then I shouldn’t be buying products from you.”
Kachikwu said he needed companies to invest in more infrastructures such as refineries and pipelines, while the country was also seeking crude-for-loans deals to monetise its untapped oil resources. “The petroleum industry got us here. It has got to get us out of here too. It (high oil prices) spoilt everybody and we messed it all up.”
The federal government is also working to get the moribund refineries back to its capacities. The government in its road map for the oil and gas sector tagged Seven Big Wins unveiled recently by President Muhammadu Buhari, stated that it would spend between $1.4 billion and $1.8 billion to rehabilitate the country’s refineries within two years in a bid to reposition the industry.
It stated that the rehabilitation would be carried out with the participation of the private sector as the road map represented the short and medium-term priorities to grow the Nigeria’s oil and gas industry from 2015 to 2019.
Part of the implementation strategy of the road map is for the government to ensure integrity assessment of all existing refineries and formulate investment plans to refurbish the facilities and improve their capacities. The government, in the report, said the short-term objective within two years would be the execution of a comprehensive rehabilitation programme under private sector participation to improve operations and increase capacity utilisation.
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