‘No Plan To Import Crude Into Nigeria’

Oil refinery

Regulators of the oil and gas sector have denied alleged plans to import crude oil from neighbouring African countries.

The Guardian Nigeria report continues:

Officials of the Department of Petroleum Resources (DPR) and the Nigerian National Petroleum Corporation (NNPC) say there has not been any concrete arrangement to supplement crude oil with import from Chad or any other African country despite the supply challenges the nation’s refineries are experiencing in getting feedstock due to vandalism of oil pipeline.

Unconfirmed reports had indicated that NNPC was considering the option of importing crude oil from Chad to feed the Kaduna Refining and Petrochemical Company (KPRC) due to pipeline vandalism, which has made it impossible to get crude oil across to the facility.
It is not yet clear why crude for the Kaduna Refinery is being considered first because all the nation’s refineries are currently being starved of crude supply. There is also the fact that the turnaround maintenance for the refineries has not been concluded, so it is uncertain if the refineries are in a fit state to receive the crude, whether from local sources or imported.

In a response to The Guardian enquiry yesterday, DPR and NNPC said such an option had not been made official.

Responding to whether NNPC has been issued a licence to import crude oil into the country, a DPR source in a text message said: “NNPC is not considering importing crude oil from any country. The corporation is trying to work out some issues. The DPR can only come into the matter once decisions have been concluded by NNPC to import crude oil.”

Besides, stakeholders, who spoke to The Guardian on the subject, kicked against the idea of importing crude into the country, and instead, urged the Federal Government to tackle the insurgency in the Niger Delta, and embark on a repair of the vandalized pipelines to enable the flow of crude to the refineries.

A reliable source at the NNPC told The Guardian yesterday that there has not been any arrangement to that effect. “Even if the corporation is considering such a move, it has not been made official, and I don’t think the Minister of State for Petroleum Resources is aware of it. We only read it in the daily and I don’t think any of my colleagues is aware of any such move,” the source said.

Nigeria’s four refineries in Port Harcourt, Kaduna and Warri, with combined capacity of 445,000 barrels per day, have remained under-utilized for a long time, due to proper turnaround maintenance, now compounded by the re-launch of militancy in the oil-rich Niger Delta.

Specifically, Warri and Port Harcourt refineries produced at 24.4% and 11.8% capacity, while Kaduna refinery produced at zero per cent as at the end of June.

June report from the NNPC showed a deficit of ₦26.51 billion against trading surplus of ₦274 million reported in May 2016.

Reacting to the alleged proposal to import crude oil, the Director of the Center for Petroleum Energy Economics and Law, University of Ibadan, Adeola Adenikinju, stressed the need for the Federal Government to tackle the issue of pipeline vandalism to avoid the importation of crude to feed the refineries.

Adenikinju, who said that the move could be used as a short-term solution to keep the refinery running, urged government to ensure the protection of billions of dollars investments in the Niger Delta.

He stated: “You must look at various options that we have to ensure energy security. There has been a lot of disruptions of oil production activities in the Niger Delta, which has made it impossible for our refineries to produce.

“It is more expensive to import refined petroleum product therefore, importing crude as a short-term measure is good for the country. I think they may have considered that Chad crude oil is compatible with Nigeria refineries.”

Speaking also on the issue, the Chairman of Petroleum Technology Association of Nigeria (PETAN), Bank-Anthony Okoroafor, said importing crude oil from neighbouring countries was not the right option for the country.

For Okoroafor, this option is not sustainable and therefore should not be explored.