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Nigeria is losing $1,000 on every barrel of crude oil it exports, due to a lack of the added value from refining, Nigerian media quoted energy policy expert Henry Adigun as saying at a conference.
This loss is no longer sustainable, Adigun said.
The Nigerian federal government is supporting local refineries, but the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is not empowered in its statutes to support a monopoly of fuel supply and distribution, the local newspaper The Sun quoted Adigun as saying.
Nigeria is looking to boost both crude oil production and domestic refining.
Africa’s largest refinery, the new Dangote facility in Nigeria, has recently started up production. With a capacity of 650,000 barrels per day (bpd), the refinery is expected to meet 100% of Nigeria’s demand for all refined petroleum products and have a surplus of each of the products for export.
Meanwhile, Nigeria’s national oil company NNPC Ltd has declared a state of emergency on production in Nigeria’s oil and gas industry as Africa’s largest oil producer struggles to boost output.
NNPC believes that Nigeria needs to take urgent action to address the challenges that have plagued the oil and gas industry for years, NNPC Group Chief Executive Officer, Mele Kyari, said in July.
“We know what we have to do at the level of assets. We have engaged our partners, and we will work together to improve the situation,” NNPC’s Kyari said.
The combination of pipeline vandalism and oil theft with a lack of investment in capacity has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance. Due to the underproduction, OPEC even reduced last year the quota for Nigeria’s oil production.
An analysis of the oil and gas assets in Nigeria has found that the largest OPEC producer in Africa can easily pump 2 million bpd of crude oil without deploying new rigs, Kyari said.
Nigeria currently produces about 1.5 million bpd of crude.
