Following several failed attempts to resolve pending issues, crude oil refinery operators have confirmed that the volume of crude oil required for the production of refined petroleum products by modular refineries is not being met by the Federal Government.
It was also gathered that all functional modular refineries in Nigeria are refining below capacity and making losses daily.
“All (modular refineries) are refining below capacity and making losses daily, as the only feedstock currently available to them is what those that have marginal fields are producing, or what they can buy from indigenous companies around them that have marginal fields,” said Dolapo Kotun, the Deputy Chairman of the Crude Oil Refinery Owners Association of Nigeria (CORAN).
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“Discussions have been ongoing for a while; no template or framework/process for supply and delivery has been given to our members who are in operations, having long since reached mechanical completion and final inspection.”
Last month, the NUPRC claimed that it was meeting the crude oil requirements of modular refineries after some industry operators criticized the commission for not supplying crude to the plants.
“Contrary to insinuations from some operators in the refinery business in Nigeria that the continued failure to supply local refineries with crude oil is capable of destroying members’ investment and stifling growth in the sector, the NUPRC said it has delivered 3,614,936 barrels of crude to three local refineries between September 2021 and May 2023,” the commission stated in a statement released to the public.
It said only refineries that complied with the relevant requirements of Section 109 of the Petroleum Industry Act 2021 were entitled to crude supply.
“Between January 2019 and August 2021, the period before the PIA came into effect, 1,726,049 barrels of oil were supplied to two refineries that met the requirements of the law at the time.
“Walter Smith and NDPR operate the two refineries. The post-PIA supplies were made to Walter Smith, NDPR, and OPAC refineries.
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“The commission recently approved Millennium Oil and Gas Limited to supply by trucking 60,000 barrels of crude oil at the rate of 20,000 barrels per month for three months to OPAC and Duport refineries in Edo State,” the NUPRC said in its statement.
But the CORAN official, who is the Executive Director, Operations, Ikwe-Onna Refinery Ltd., and Chairperson, Downstream, Women in Energy, Oil and Gas, countered the NUPRC, saying that even some volumes of guaranteed crude had not been given to modular refineries.
“The operational modular refineries are yet to receive a drop of the 60 per cent feedstock guaranteed at ATC (Approval to Construct) license issuance,” she said.
