Nigeria will shut down three of its oil refineries for comprehensive rehabilitation, according to an announcement by the Nigerian National Petroleum Corporation (NNPC) on Wednesday.
The Kaduna, Warri and Port Harcourt refineries will shutter to allow the national oil company to return refining capacity to their nameplate levels, NNPC managing director Dr. Maikanti Baru told reporters at the capital.
"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," Baru said during the Nigerian Pipeline Security Conference going on in Abuja this week.
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.
"Obviously, it is going to be a complex procedure and as such, we have to break down the various work packages to ensure that all the various workforces have sufficient focus, and if you notice the time that we inaugurated (eight committees on the refineries rehabilitation), the work streams are composed of the general managers and executive directors level, and they will be having a day-to-day look at it, while the steering committee is at my level and that of the chief operating officers all looking at the problems the workstations have and they will proffer solutions immediately," Baru added.
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 have 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.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More