Nigerian Refineries Failed to Produce Petroleum Products in Nine Months - Report

6 April 2020

Refineries in the country, located in Port Harcourt, Warri and Kaduna, have yet to produce a drop of petroleum in the last nine months, report from the Nigerian National Petroleum Corporation (NNPC), has indicated.

Excerpts from the latest document released by the corporation showed that the refineries with a combined installed capacity to refine 445,000 barrels per day locally, had been operating at zero consolidated capacity utilisation level since July last year.

THISDAY gathered that before July last year, the facilities worked at 5.5 per cent in January, 13.18 per cent in February, 3.17 per cent in March, zero per cent in April, 1.75 in May and 2.4 per cent of installed capacity in June before it completely stopped production since July last year till date.

While the current combined installed capacity of PHRC is 210,000 bpd, those of KRPC and WRPC are 110,000 and 125,000 respectively and when functional are able to refine products ranging from petrol, jet fuel, diesel, fuel oil and liquefied petroleum gas.

The NNPC has therefore in all the months that the refineries have been out of service, fully embarked upon the importation of all the petrol consumed by Nigerians, which the Department of Petroleum Resources (DPR) put at 38.2 million litres daily.

However, the report noted that the refineries, for the whole nine months stretch they have not operated were undergoing rehabilitation, which accounts for why the country now sources all its needed daily use of the product from outside the shores of Nigeria.

In January, the Senate while setting up a probe panel on the matter, put the turnaround maintenance expenditure on the ailing refineries just between 2013 and 2015 at $396 million without commensurate results.

Describing the constant importation of the product as an 'embarrassment', the President, Ahmed Lawan, mandated its Committee on Downstream Petroleum Sector to carry out a holistic investigation on the turnaround maintenance expenditure and current state of the refineries in the country.

But the Group General Manager , Group Public Affairs , Mr. Kennie Obateru, told THISDAY yesterday that the maintenance of the refineries would be extended till the end of 2023.

He added that the expectation of the corporation is that by the time the Turn Around Maintenance (TAM) is fully completed, the plants would be able to operate at about 90 per cent.

"The ongoing revamp of the plants is expected to be completed by fourth quarter of 2023. It would ultimately improve the capacity utilisation of the facilities in line with the set roadmap for the rehabilitation to achieve at least 90 per cent capacity utilisation upon completion of the process," he said.

According to the full NNPC report ,which chronicled the fact that Nigeria is not currently refining in the country, the corporation has continued the distribution of the imported products to reach all Nigerians.

"In December 2019 (till now), the three refineries processed no crude and produced -619 MT (metric tonnes) of finished products; comprising -2,593 MT and 1974 MT by WRPC and PHRC respectively. Combined yield efficiency is 0.00 per cent owing largely to on-going rehabilitation works in the refineries.

"For the month of December 2019, the three refineries produced -4,513 MT of intermediate products at combined capacity utilisation of 0.00 per cent. The intermediate products were primarily used by WRPC and PHRC.

The declining operational performance recorded is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilisation once completed.

"The Corporation has been adopting a Merchant Plant Refineries Business Model since January 2017. The model takes cognisance of the products worth and crude costs. The combined value of output by the three refineries (at Import Parity Price) for the month of November 2019 amounted to approximately N0.10billion.

It said that there was no associated crude plus freight cost for the three refineries since there was no production but operational expenses amounted to ₦13.55billion.

" This resulted to an operating deficit of ₦13.46billion by the refineries. In December 2019, 1,637.85 million litres of PMS were supplied into the country through the DSDP arrangement as against the 1,792.91 million litres of PMS supplied in the month of November 2019.

It added that no white product (petrol and DPK) was produced in December 2019 and for the past consecutive months.

"A total of 2.775 billion litres of white products were sold and distributed by PPMC in the month of December 2019 compared with 0.841billion litres in the month of November 2019.

"This comprised 2.762billion litres of PMS, 0.013billion litres of AGO and 0.000 billion litres of DPK. Total sale of white products for the period December 2018 to December 2019 stood at 21.861 billion litres and PMS accounted for 21.514billion litres or 98.41 per cent" the NNPC said.

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