In Africa and even the world, Nigeria is one of the largest exporters of crude oil. According to CEIC Data, Nigeria oil production was reported at 1,255,000 barrels per day (Bpd) in July 2023. As of 2016, Nigeria was ranked 15th in the world according to the Worldometer list of oil production by country. Nigeria also has one of the largest oil reserves in the world, ranking 10th in the world as of 2016.
However, in the area of oil refining, Nigeria has been designated as the least among OPEC members. The Organization of Petroleum Exporting Country (OPEC) has identified Nigeria, a leading African oil producer, as the least refining member with an average equivalent of 10,600 bpd in five years. According to the latest OPEC Annual Statistical Bulletin 2023, the nation refined an equivalent of 33,000 bpd-2018, 8,000 bpd-2019, 1,000 bpd-2020, 5,000 bpd-2021 and 6,000-2022.
Comparing refining capacity with other OPEC members.
On the other hand, Saudi Arabia emerged as the highest refining OPEC member with an average equivalent of 2.6 million barrels per day (bpd) during the period. Saudi Arabia in particular refined 2.8 million bpd-2018, 2.6 million bpd-2019, 2.3 million bpd-2020, 2.5 million bpd-2021 and 2.9 million bpd in 2022. Findings have revealed that Saudi Arabia also has five functional refineries, while Nigeria has four non-functional state-owned and some privately-owned plants.
Other OPEC members – except Equatorial Guinea, whose figures were not available – including Algeria, Angola, Congo, Gabon, Iran, Iraq, Kuwait, Libya, United Arab Emirates and Venezuela also have impressive refining figures during the period. Due to the lack of refining capacity, Nigeria continues to import petroleum products from the global market. Experts have attributed this development to inconsistent policies, lack of long-term funds, and difficulties associated with sourcing foreign exchange and feedstock required to support the construction of new refineries.
Investors in refineries faced various problems.
These experts explained that in the past, many promoters were attracted to investing in refineries because the government allowed them to participate in the lifting of crude oil. They also disclosed that the promoters of the refineries did not have access to long-term funds and foreign exchange required to import various items. Additionally, lack of sustainable crude oil supply guarantee also constituted a factor. In an interview with the media, Lead Promoter, EnergyHub Nigeria, Dr. Felix Amieyeofori, revealed that the problems that the investors encountered resulted in the expiration of the licenses without much impact.
Similarly, National President of Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, said that no reasonable investor can invest in a lawless country where there is no rule of law, where there is a high level of insecurity and where elections are brazenly rigged. As well, former Managing Director of Niger Delta Petroleum Resources, Dr. Layi Fatona, noted that conscientious focus and determination are required in the pursuit and delivery of any project in the Nigerian airspace. “There is no capital long enough and not much equity is available to pursue refining projects,” he said.
FG will end fuel importation in 2024, says minister.
Meanwhile, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, while inspecting the Port Harcourt Refining Company in Eleme, Rivers State, stated that the Federal Government would end fuel importation in 2024. He said that the inspection was to assess the extent of work done. According to him, the project will be completed as scheduled. “The Port Harcourt Refinery will come on stream fully by the end of this year, 2023. Warri will start operating by the first quarter of next year and then, Kaduna will come on stream towards the end of next year,” he added.