The management of AIPCC Energy Limited, which operates the Edo Refinery and Petrochemicals Company Limited, has expressed concern over the continued scarcity of crude oil, despite the fact that the refinery is fully operational and capable of producing 1,000 barrels per day.
The management stated on Saturday that despite President Bola Tinubu’s directive mandating the Nigerian National Petroleum Company Limited to supply crude oil to the Dangote Petroleum Refinery and other modular refineries in the country in naira, the Edo refinery has yet to receive any crude from the relevant authorities, according to The Punch.
A representative of the company, Segun Okeni, said the management of the refinery, situated at Ologbo in Ikpoba-Okha Local Government Area of Edo State, is facing significant challenges due to persistent lack of crude oil supply.
Okeni pointed out that the refinery, which requires 1,000 barrels per day of stream crude, can hardly operate at full capacity.
He noted that, despite the company’s existing crude oil supply agreements with Seplat and ND Western dating back to 2022, bureaucratic obstacles have stopped the refinery from receiving the critical resource.
Okeni stated that in 2021, ERPCL’s letter addressed to the Group Chief Executive Officer of NNPC, Mele Kyari, following a series of meetings and persistent communication with him, was not responded to.
He said, “This is to raise an alarm on the persistent lack of crude despite being a fully functional 1,000 barrels per day stream crude oil refinery.
“On August 18, 2021, our team led by our chairman, met with the NNPC CEO and its top management team to discuss our intention to buy crude oil from NNPC and we immediately wrote seeking crude supply. The letter was dated July 22, 2024.
“In July 2022, the representatives of NNPC (from Abuja and NPDC Benin) visited our facility for site inspection and to confirm the mechanical completion of the Edo refinery.”
“In September 2022, we were invited for a commercial negotiation meeting with the NNPC Head of Terms, after which we sent a follow-up letter identifying the oil fields from which we can offtake crude oil.
“In March 2022, we also wrote to the Ministry of Petroleum Resources, informing it of our refinery status, future projects, and our challenges of lack of crude oil supply to our refinery.
“We also wrote and had a meeting with the NNPC Exploration and Production Limited between November 2022 and March 2023, indicating our severe need for crude oil supply from oil fields where NEPL has equity stakes,” Okeni added.
However, the ERPCL official stated that despite these meetings, correspondences, and discussions with NNPC over the last three years regarding crude oil supply, nothing has been done.
Mowing forward, ERPCL said NNPC and other crude oil suppliers need to put loading infrastructure in place to allow for truck loading.
Describing the past two years as frustrating for the establishment, he said, “If we, the local investors can’t get crude even as small as we are, how can foreign investors be encouraged to invest in the country?
“The total daily demand of all modular refineries is not up to two per cent of the daily crude oil production. Our lifting from the pumping station will even reduce pipeline losses.”
Okeni underlined that loading from the NNPC pumping station to the export terminal is less expensive, as it saves on pipeline export terminal charges and losses.
He said this would make the modular refineries more competitive than the offshore refineries that come to the export terminal to take the crude thereby making costs trickle down to Nigerian consumers.