Nigeria’s Minister of State for Petroleum Resources in charge of Oil sector, Mr. Heineken Lokpobiri, has said that Nigeria is ready to supply crude oil to Dangote Refinery and other local refineries if crude oil production is ramped up.
Speaking at the just concluded Energy and Labour Summit 2024 organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja. the minister said: “Our ambition is to ramp up production. It is only when we ramp on production that the midstream and the downstream can also be successful. You know we resolve at the Federal Executive Council to sell crude to local refineries – Dangote and the other refineries that are refining products for local consumption.
“But the bigger challenge is whether we have enough quantity to be able to supply them because of certain things that happened before we came. You will agree with me that when I became minister one year ago, we were doing barely about a million barrels, but today we’re doing 1.7mbpd approximately, inclusive of condensate.”
Lokpobiri added that supporting local refining is the way to go. “We can look for investors to explore and ring out this crude, so I will be able to meet both our domestic obligation and also export some to be able to raise more dollars and meet our obligations.
“We are committed to ensuring we support local refineries with all the feed-stock. If you must supply refineries in Nigeria and you don’t have the crude to supply, it remains something that is written beautifully in a law,” he said.
He said the Nigerian Government would ensure there is healthy competition by being fair to both the small and the big refiners.
On the issue of divestment of international oil companies and the need to ramp up production, the minister stated that Nigeria also needs to repair its pipelines, which according to him, are old, corroded, and expired.
The minister disclosed that the Nigerian National Petroleum Company Limited (NNPCL) does not have the funds required to rebuild old pipelines in Nigeria.
He explained that even if Nigeria can produce more than 1.7 million barrels of crude oil, the problem is how to evacuate it to the terminal.
“Part of our problem is that pipelines that were traditionally transporting our crude were built in the 1960s and the 1970s and the lifespan is since over. We have identified that even when we can produce, evacuation is a big problem.
“The reason why pipeline vandalism is very easy to do is because the pipelines have all expired they completely corroded and so, anybody can just go and tap it and the thing is busted; but there are better technologies which are more expensive, there are better pipelines that other people are using in other countries, but they are not cheap, We also need to change our model.
“Now, the NNPC that is our joint venture partner, do they have the money to be able to replace these pipelines? I think NNPC will speak for themselves whether they have the money to be able to do that, and I don’t think they have,” Lokpobiri declared.
He, however, called for public-private partnerships (PPP) to fix the old pipelines, saying, “That is why we have to go for the global model – PPP. We have to get the private sector to come in.
For the private sector to come into any country to invest, he said they must have confidence in such a country, stressing that this was lacking in the past 12 years when there was no foreign investment in the nation’s oil company.
“When this government, came we tried to rebuild the confidence and investors are coming,” Lokpobiri added.
GIK/APA