Crude shortage cause of low production in Dangote, PH refineries – FG

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has expressed concern about the crude oil shortage faced by the newly inaugurated Dangote Petrochemical Refinery, Port Harcourt Refinery, Warri Refinery, and modular refineries in Nigeria. These refineries may struggle to obtain sufficient locally sourced crude oil for the production of petroleum products unless deliberate efforts are made to boost investments and increase crude production in the sector.

Specifically, the Dangote refinery, a subsidiary of Dangote Industries Limited, is a massive 650,000 barrels per day crude oil refinery located in the Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria. Despite its capacity, the refinery may not receive enough feedstock to produce adequate oil, even for local consumption, unless the country takes steps to enhance crude production and attract capable investors.

The situation is not unique to Dangote alone. The government-owned refineries also face similar challenges. For instance, the Port Harcourt refinery, which has recently been rehabilitated, requires approximately 450,000 barrels of crude oil daily¹. However, both major and independent marketers have reported that they are yet to receive refined products from any of the refineries, as the Nigerian National Petroleum Company Limited (NNPCL) continues to import fuel using scarce foreign exchange.

According to him, Nigeria has in the last five years slowed down investments, saying “We are the lowest in the world, if you talk of investment to reserves ratio, Nigeria is 25 per cent. Nigeria is the least in the world. Between 2017 and 2022, if you look at the figures, Nigeria’s investments compared to our reserves is  25 per cent. There is something we are not doing right.”

He lamented that many oil wells have been left idle even in the face of dwindling crude production.

“We need to ramp up production, there are so many idle wells that we can give to the right people.  We need to ramp up production in the upstream, so that the midstream and the downstream can also be successful. We need to increase our production in the upstream so that we will be able to produce the right quantity that will service our obligations, both locally and internationally.