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Nigeria’s inefficient refineries are unable to meet domestic fuel demand and have made Nigeria the only OPEC member to import gasoline, according to the managing director of the Nigerian National Petroleum Corporation (NNPC), and is the world’s largest petrol importer.
“We actually import one million tonnes of PMS [Premium Motor Spirit] every month into a country that produces oil and gas and has refinery. It is a shameful thing, it doesn’t make sense and that is what we are trying to address,” Nigerian media quoted NNPC Group Managing Director Maikanti Baru as saying.
NNPC said in February that it had imported US$5.8 billion worth of gasoline in an attempt to alleviate the fuel shortages and end the queues at the gas stations in Nigeria.
During a visit to the Nigerian Customs Service on Friday, NNPC’s Baru also pointed the finger at petroleum product smugglers who have harmed the efficient distribution of fuel in Nigeria, saying that “unpatriotic marketers are exploiting both land & coastal borders to smuggle out petroleum products meant for the Nigerian market to other West African countries due to sheer greed & lack of patriotism.”
But Nigerian refineries desperately need upgrades to become more efficient and to start processing more crude oil into fuels.
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“Upgrades of our refineries from the current name plate capacity of 445,000 barrels of crude oil per day (bpd) to at least 1million bpd is the focus. Discussions with relevant investors and financiers are ongoing. The expectation is that the refineries will be fully back on stream by December 2019,” Baru said, noting that the country would soon announce the names of the investors who would work to upgrade Nigeria’s ageing inefficient refineries.
NNPC is in the final stages of negotiations with two international consortia consisting of oil majors and oil traders for the upgrade of its refineries, sources familiar with the talks told Reuters earlier this week.
The first consortium includes the world’s largest oil trader Vitol, Italy’s Saipem, U.S. firm General Electric, and Nigerian traders Sahara Group and MRS Oil Nigeria Plc, and vies to upgrade the Warri refinery in southern Delta state and the refinery in northern Kaduna state. The second group that would revamp two refining plants at Port Harcourt includes commodity trader Trafigura, Italy’s oil major Eni, Spanish refiner Cepsa, and Nigeria’s Oando, the sources told Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.