Nigeria: We Deliberately Shut Down Refineries - NNPC GMD

27 November 2020

The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, on Thursday said the country's refineries were shut down despite maintenance carried out because crude could not be supplied to them through the vandalized pipelines.

This was contained in the 2021 budget proposal Kyari presented to the House of Representatives Joint Committee on Petroleum Upstream, Downstream and Gas.

The News Agency of Nigeria (NAN) reports that Kyari said the corporation deliberately shut down the refineries because they no longer made sense to be operated.

He said it was only excravos pipeline which the NNPC managed to sustain through contracting process.

According to him, it is practically impossible to run pipeline at their optimum capacity.

"For instance, to run Kaduna and Warri refinery, you need to deliver 170,000 barrel of oil per day so that both will operate at 70 per cent capacity," he said.

Kyari said that at the moment, it only had over 5,000 kilometers of pipelines with 13 fuel depots, which according to him must be protected to forestall the activities of vandals.

"And I can tell you today that except the Atlas cove to Ibadan line and also the Port Harcourt to Aba line, none of these pipeline is serviced.

"We cannot flow product into these lines, the cheap one is to say they are aged but the real reason is that the level of activities of vandals on these lines is gross, monumental and profound.

He said about N43 billion was lost to oil theft and vandalism between January and June 2020.

According to him, the NNPC attends to about 80 vandalisation points every month.

He said this made the corporation resort to supply by fuel tankers through 13 fuel depots to different parts of the country.

He said the NNPC would spend N314.9 billion on various projects in 2021 as against the N444.75 billion spent in 2020.

Kyari said the corporation missed its projected production and revenue targets even before the COVID-19 pandemic.

He said oil production and sales plummeted as a result of economic meltdown and reduced oil demands as countries focused on renewable energy production.

He said the fall in revenue profile forced the NNPC to strive and reduce production cost and cut procurements down by 30% and operated below 40% of expected operation.

Kyari said because of the revenue decline, the NNPC failed to meet its cash calls and other obligations.

He said while the country kept its eyes on improving the oil sector, it had also, like the rest of the world, keyed into the renewable energy alternative.

He urged the National Assembly to pass the Petroleum Industry Bill.

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