The Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, has said the newly inaugurated Dangote Petrochemical Refinery, Port Harcourt Refinery, Warri Refinery and modular refineries in the country may not get enough crude oil locally for the production of petroleum products unless deliberate efforts are made to increase investments and crude production in the sector.
Lokpobiri said unless the country ramped up production by handing over its oil wells to capable investors, the refineries would not get enough feedstock to produce enough oil, even for local consumption.
On January 12, the Dangote refinery announced that it had begun the production of both diesel and aviation fuel.
The Dangote refinery, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria
As of January, it was said that the facility had received six shipments of one million barrels each of crude oil from the Nigerian National Petroleum Company Limited.
Recently, Shell Nigeria Plc said it had completed the supply of 450,000 barrels of crude oil to the newly rehabilitated Port Harcourt refinery.
However, both the major and independent marketers said they had yet to receive refined products from any of the refineries as the NNPCL continues importation of fuel with scarce foreign exchange.
Speaking at the seventh edition of the Nigeria International Energy Summit held in Abuja on Tuesday, the minister said the Dangote refinery alone would need up to 650,000 barrels of crude oil daily, while the government-owned ones would gut about 450,000 barrels too.
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.
“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 held that unless the country made the investments, the proposed transition from fossil fuel to gas would also be a mirage.
The oil minister opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.
“We must find a solution to our forex problem. Nigeria has no need importing 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.
The former Senator noted that Nigeria suffers energy poverty despite its abundance of oil and gas reserves, which he said had not translated to 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 on energy transition, Lokpobiri joined the Organisation of the Petroleum Exporting Countries to reject the call to stop investing in fossil fuels.
According to him, the West is asking Africa to stop investing in fossil fuels while it is not slowing down the same fossil fuel investment.
“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.(Punch)
