FG Gives Update on Warri, Kaduna Refinery Completion as Dangote, PH Prepare to Begin Sales
- The minister of State for Petroleum Resources (Oil) has said that Nigerian refineries may not get enough crude oil for local production
- He said that unless it increased production by leasing its oil wells to capable investors, Nigeria’s refinery may run out of feedstock
- According to the minister, there is a need to ramp up production upstream so the midstream and downstream can also be successful
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has called for concerted efforts to increase the sector's investments and crude oil production.
Source: Getty Images
He said the country's refineries would run out of feedstock to create enough oil, even for domestic use, unless it increased production by leasing its oil wells to capable investors.
Speaking on Tuesday, February 28, at the seventh Nigeria International Energy Summit in Abuja, the minister estimated that the government-owned refineries would use roughly 450,000 barrels of crude oil daily, while the Dangote Refinery alone would require up to 650,000 barrels.
According to Punch, the minister claimed that investments in Nigeria have decreased over the past five years.
He said:
“We are the lowest in the world; if you talk of investment to reserves ratio, Nigeria is 25 per cent. Nigeria is the least in the world. Between 2017 and 2022, if you look at the figures, Nigeria’s investments compared to our reserves are 25%. There is something we are not doing right.”
Even with the declining supply of crude oil, he lamented that many oil wells remained unplugged.
“We need to ramp up production; there are so many idle wells that we can give to the right people. We need to ramp up production upstream so that the midstream and the downstream can also be successful."
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No need to import fuel
He noted that the suggested switch from fossil fuel to gas would be an illusion unless the nation made the necessary expenditures.
Concerned that most of Nigeria's foreign cash is used to import fuel, the oil minister stated that the government does not need to import petroleum.
He called for a solution to the country's forex problem.
He said:
Nigeria has no need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products. But now, we are rehabilitating our refineries, which will come into full operation by the end of this year.
“Port Harcourt refinery’s first phase has started; Warri refinery is about to be completed between now and the next two months, Kaduna will come; all will be rehabilitated this year. Even after rehabilitation, if we do not ramp up production, if we do not get the right investment, we won’t be able to get the feedstock.”
Speaking about the energy transition, Lokpobiri disagreed with the demand to stop investing in fossil fuels.
He stated that although Africa continues to invest in fossil fuels, the West is pressuring the continent to cease doing so.
FG gives oil firms in Nigeria strict orders
Legit.ng reported that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has ordered oil companies in Nigeria to supply about 483,000 barrels of crude oil daily to local refineries for the next six months beginning January 2024.
The initiative is part of Nigeria’s efforts to ensure regular supply to local refiners for domestic consumption.
About six local refineries are expected to begin production in the coming year, including the 650,000-capacity Dangote refinery and Nigeria’s three refineries in Port Harcourt, Warri, and Kaduna.
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Source: Legit.ng
