The Minister of State for Petroleum Resources in Nigeria, Heineken Lokpobiri, has voiced concerns about the availability of a sufficient supply of local crude oil for recently opened refineries.
To guarantee that these refineries receive sufficient feedstock for the production of petroleum products, particularly for domestic consumption, Lokpobiri underlined the need for increased investments and crude production.
The minister emphasised how crucial it is to manage the nation’s oil wells and increase production by bringing in qualified investors. Without such initiatives, he warned, the refineries might have trouble obtaining enough crude oil to meet demand for production.
The Dangote refinery recently declared that it would start producing aviation fuel and diesel on January 12, underscoring the increasing importance of domestic refining capacity in Nigeria’s energy industry.
Located in the Dangote Industries Free Zone in Ibeju-Lekki, Lagos, Nigeria, the Dangote refinery is a 650,000 barrels per day crude oil refinery and a subsidiary of Dangote Industries Limited.
It was reported in January that the Nigerian National Petroleum Company Limited had shipped six million barrels of crude oil to the facility.
Shell Nigeria Plc announced recently that it had finished supplying 450,000 barrels of crude oil to the refinery in Port Harcourt, which had just undergone rehabilitation.
However, since the NNPCL is still importing fuel with limited foreign exchange, both the major and independent marketers stated they have not yet received refined products from any of the refineries.
Speaking on Tuesday at the seventh Nigeria International Energy Summit in Abuja, the minister estimated that the government-owned refineries would use roughly 450,000 barrels of crude oil per day, while the Dangote refinery alone would require up to 650,000 barrels.
He claims that over the past five years, investments in Nigeria have decreased, 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.”
Even in the face of declining crude production, he bemoaned the fact that many oil wells have remained idle.
“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.
“Dangote Refinery needs about 650,000 barrels a day; we are rehabilitating our government-owned refineries which may need about 400,000bpd. We have a couple of modular refineries coming up. On the whole, we need to ramp up production so that we will be able to meet our domestic needs and to guarantee energy security,” Lopkobiri explained.
He believed that the suggested switch from fossil fuel to petrol would likewise be a mirage unless the nation made the necessary investments.
Concerned that the majority of Nigeria’s foreign exchange is used to import fuel, the oil minister stated that the country does not need to import fuel.
“We must find a solution to our forex problem. Nigeria has no need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products. But now, we are rehabilitating our own refineries, which will come into full operation by the end of this year.
“Port Harcourt refinery’s first phase has started; Warri refinery is about to be completed between now and the next two months, Kaduna will come; all will be rehabilitated this year. Even after rehabilitation, if we do not ramp up production, if we do not get the right investment, we won’t be able to get the feedstock,” he said.
Despite having large reserves of gas and oil, the former senator pointed out that Nigeria experiences energy poverty, which he claimed hasn’t translated into economic prosperity like in the Middle East.
“We need to unravel what other climes have done to bring economic prosperity to their nations that we have not done. If you have reserves underground and you don’t bring them out, they won’t translate to anything.
“We need to give it to those who have the proven capacity to explore oil and gas for the benefit of Nigerians and the global energy landscape. In the past, the allocation of blocks was politicised. The easiest way to guarantee energy security is to get the right investment,” the minister added.
Speaking about the energy transition, Lokpobiri disagreed with the demand to stop investing in fossil fuels and joined the Organisation of the Petroleum Exporting Countries.
He claims that while Africa continues to invest in fossil fuels, the West is pressuring the continent to cease doing so.
“We will transit at our own pace. Our target is to explore these resources in a more environmentally friendly way. We are not stopping it, we need the money to be able to transit, and for us to transit, we must get the right investments,” he said.
Source: Allnews.ng