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Nigeria target self-sufficient crude refining

Nigeria target self-sufficient crude refining
Photo by George Socka- Ask Nigeria

Mini refineries lead Nigeria’s quest to own self-sufficiency in crude refining.

Despite being endowed with vast reserves of crude oil, Nigeria has witnessed a decline in its oil industry in recent years. In earlier times, the oil industry has been a key driver of the country’s economic growth. The sector’s decline is due, in part, to the country’s failure to develop capacious refineries and the country’s subsidized imports of refined petroleum products. Nevertheless, Nigeria is making steady progress toward attaining domestic self-sufficiency in crude refining in order to ensure sustainable solutions to product availability, price stability, and maximization of the benefits of the oil.

As such, the Nigerian government aims to end the practice primarily through Aliko Dangote’s 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone near Lagos. The refinery will meet 100% of the Nigerian requirement of all refined products and also have a surplus of each of these products for export. Conversely, a local contractor in the Niger Delta is building one of a growing number of mini refineries on a deep river bank. With this, the Nigerian government intends to leverage the development in order to ablactate Nigeria’s economy off foreign fuel finally.

Government intends to refurbish its non-functioning infrastructure.

For many years, Nigeria, the continent’s top crude oil producer, has shipped its crude oil overseas for refining while importing and subsidizing the finished product. This has apparently impacted the economy particularly when oil prices increase and sales fall since the country lacked a large refinery. The government intends to refurbish its own non-functioning infrastructure at the same time it’s working to get Dangote’s refinery up and running. Mini-projects like this are leading the charge in the country’s fight to reduce its yearly import costs by billions of dollars.

The government has promoted the construction of smaller modular facilities, such as AIPCC Energy Ltd.’s 30,000 BPD Koko refinery, which is now being designed in China and will be deployed in the southern Delta state. Daghe Osime, the executive director of AIPCC Energy, a Nigerian multinational private energy firm, stated the company’s goal of capturing 20% of the whole diesel market in Nigeria. He predicts that the plant’s annual revenue from selling diesel into the local market would be roughly 400 billion naira ($867 million). Through a contract with Mercantile & Maritime Energy Pte Ltd. of Singapore, it stands to gain nearly 230 billion naira by shipping naphtha and fuel oil.

Four companies constructed facilities with 27,000 BPD capacity.

To aid in Nigeria’s refining efforts, the country’s first privately owned refinery, the Edo Refinery (ERPC) 6000-barrel-per-day, was established. In the meanwhile, AIPCC built a “proof of concept” refinery in Edo state with a 1,000 BPD capacity in 2021 and planned to begin construction on expanding capacity at its Koko location. Although scores of companies like AIPCC were granted permits, only four have actually constructed facilities with the capacity to handle 27,000 barrels of oil per day. The corporations involved have committed to increasing production significantly, but even so, this represents barely 2% of Nigeria’s total output.

Compared to Dangote’s development, which has cost $20 billion, more than twice the amount estimated in the first place, and has missed many deadlines, this project seems quite modest. Nevertheless, the Nigerian National Petroleum Corp (NNPC), which owns 20% of the company, would provide nearly half of the oil the massive facility requires. With this project, Nigerian oil, which can be refined together with other crudes, would have a market opportunity worth $21 billion per year.

AIPCC has finalized a supply agreement with one local producer.

Notably, the widespread theft of most of the delta’s pipeline network has also significantly reduced Nigeria’s petroleum production. Osime, the executive director of AIPCC Energy, has said that the firm may provide a safe option to marginal field producers who are concerned about pipeline vandalism because of its location as a local refinery. According to him, AIPCC has already finalized a supply agreement with one local producer and is in advanced negotiations with London-listed Seplat Energy Plc regarding other supplies. With these refineries, Nigeria will no longer need to spend its little foreign money on fuel imports, freeing up funds that may be used toward supporting other, more peripheral enterprises.


Related Links

AIPCC: Website   Wikipedia: Website

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8 days ago

Nigeria target self-sufficient crude refiningMini refineries lead Nigeria’s quest to own self-sufficiency in crude refining. – Express your point of view.

Abusi
Member
8
8 days ago

I don’t mind if we don’t export fuel, but the most important is for us to be self sufficient. We need to ensure we are providing enough fuel for ourselves to prevent scarcity.

Member
9
8 days ago

Nigeria target self-sufficient crude refining. Is good to have refining in Nigeria. Federal government should give licence to companies that want to build

Member
8
8 days ago

It is very important we ensure we are providing enough fuel for ourselves to prevent scarcity. With this, we will no longer need to spend our little foreign money on fuel imports. Also, freeing up funds that may be used toward supporting other, sectors.

Last edited 8 days ago by Iyanu12345ogg
Member
8
8 days ago

Nigeria is steadily moving toward achieving domestic crude refining self-sufficiency in order to guarantee long-term solutions for product availability, price stability, and maximizing the advantages of the oil.

Member
8
8 days ago

In spite of the fact that We are blessed with large deposits of crude oil, Nigeria’s oil industry has been on a downward trend during the past few years.

Member
8
8 days ago

Historically speaking, the oil industry has been an important factor behind the expansion of the country’s economy.

Member
8
8 days ago

The country has not been able to create capacious refineries, and the country also subsidizes its imports of refined petroleum products, both of which have contributed to the downfall of the sector.

Member
8
8 days ago

The government of Nigeria plans to take advantage of the development in order to wean the country’s economy off of its reliance on imported petroleum once and for all.

Member
8
8 days ago

These refineries will eliminate the need for Nigeria to spend its limited foreign exchange on fuel imports, allowing the country to redirect those resources toward supporting other, less central, businesses.

Member
8
8 days ago

Because of the company’s location as a nearby refinery, marginal field producers who are concerned about pipeline vandalism may find that the company offers a risk-free alternative to meet their needs.

Member
8
8 days ago

The rampant theft of a majority of the pipeline network in the delta has also drastically cut Nigeria’s oil production.

Member
8
8 days ago

It’s good to hear that Nigeria is steadily making progress toward establishing domestic crude refining self-sufficiency in order to ensure long-term solutions for product supply, price stability, and maximizing the benefits of the oil.

Member
8
7 days ago

If we are self sufficient enough fuel will be available and afford scarcity of fuel we should work on make our refineries to work well it will benefit us alot with that

Member
8
7 days ago

It will no longer be necessary for Nigeria to use its limited foreign money on gasoline imports thanks to the construction of these refineries; as a result, the country will be able to reallocate those resources toward supporting other businesses that are less essential.

Member
8
7 days ago

Nigeria is making steady progress toward the goal of establishing domestic crude refining self-sufficiency in order to ensure long-term solutions for product supply, price stability, and maximizing the benefits that may be derived from the oil.

Member
8
7 days ago

As a means of ensuring product availability, pricing stability, and maximizing the benefits of the oil, Nigeria is steadily working toward domestic crude refining self-sufficiency.

Member
8
7 days ago

Thanks to the development of these refineries, Nigeria will no longer need to spend its limited foreign funds on importing gasoline, allowing the nation to redirect those funds to supporting other less important enterprises.

Member
8
7 days ago

The high level of corruption in Nigeria system has prevented the federal government from refurbishing the our refineries. Some groups of people who call themselves cabals of the nation are making the repair of our refineries difficult. Must we important PMS, diesel and other petroleum products, can we produce our own? The Dangote refineries is own by an individual. Anyways let start from there.

Member
8
5 days ago

What is wrong with our refineries? Can’t they be repaired? What happened to the fund kept for the repairs? Several questions to ask. Must we rely on Dangote refinery,I believe something is going on that we are not told. Now the government has promoted the construction of smaller modular facilities, such as AIPCC Energy Ltd.’s 30,000 BPD Koko refinery, which is now being designed in China and will be deployed in the southern Delta state. What happened to the country refineries?

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