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Lack Of Crude Forces Nigeria’s Kaduna Refinery To Shutter

A lack of raw supplies has caused the Kaduna refinery in Nigeria to shut down, according to the Nigerian National Petroleum Corporation (NNPC).

Reuters said the state-run oil firm had been making arrangements for a shipment of crude to resume production at the 110,000-barrel per day facility.

Last September, the NNPC announced plans to shutter the three facilities to allow for repairs, but it is unclear if that actually happened.

Oil Minister Emmanuel Kachikwu hinted in December that a technical committee would submit its report for presidential approval. The document will detail “work aimed at bringing the four refineries operated by NNPC in Kaduna, Warri, and Port Harcourt back to their nameplate production capacities…which would eventually start in January 2018.”

“As you know, it is being the perception of the public that the repairs of the refineries are never done thoroughly. So this time, our intention is to shut down the refineries when we are ready, and then fully bring them back to what they should be as new refineries,” NNPC Managing Director Maikanti Baru said during the Nigerian Pipeline Security Conference going in Abuja last year.

Related: Goldman: Oil To Top $80 Within Six Months

Despite being Africa’s largest crude oil producer, Nigerian refining capacity is low, which has forced the government to spend foreign currency reserves on purchases of refined oil goods. Building new refineries within the country’s borders would allow Lagos to revitalize aging oil facilities while preserving foreign currency resources.

Nigeria’s oil industry and economy suffered in 2016, not only from the low oil prices, but also from persistent militant attacks on oil infrastructure that crippled crude oil production. The sabotages reduced Nigeria’s output from more than 2 million bpd at its highest point in 2015 to 1.4 million bpd last summer, the lowest production level in 30 years. Over the course of 2017, a ceasefire with the militias allowed output to recover for the most part.

By Zainab Calcuttawala for Oilprice.com

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