Economy

Edo Refinery cries out over non supply of crude oil to start production

Published

1 month ago

August 12, 2024

Admin

Like Dangote Refinery, the management of AIPCC Energy Limited, operators of the Edo Refinery and Petrochemicals Company Limited (ERPCL), has raised the alarm over non-supply of crude oil to the full functional 1,000 barrels per day stream refinery to start production.

It said in spite of the directive by President Bola Tinubu to the Nigerian National Petroleum Company Limited (NNPCL) to supply crude oil to Dangote Refinery and other modular refineries in the country in Naira, the Edo Refinery is yet to get any from the relevant authorities.

Speaking to journalists in Benin-City, the management of the refinery situated at Ologbo, Ikpoba-Okha Local Government Area, said it was facing significant challenges due to persistent lack of crude oil supply.

Representative of the company, Segun Okeni, said the refinery, which required 1,000 barrels per day, can barely function at fully installed capacity.

He said though the company has existing crude oil supply agreements with Seplat and ND Western since 2022, bureaucratic bottlenecks have prevented the refinery from accessing the much-needed resource.

He alleged that in 2021, ERPCL’s letter addressed to Mele Kyari, group chief executive officer of NNPCL after having a series of meetings and constant communication with him, was not attended to.

“On 18th August 2021, our team led by our chairman, met with the NNPCL CEO and its top management team to discuss our intention to buy crude oil from NNPCL and we immediately wrote seeking crude supply,” the letter was dated 22 July 2024.

“In July 2022, the representatives of NNPC (from HQ 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 NNPCL 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 had also written and had a meeting with the NNPC Exploration and Production Limited (NEPL) between November 2022 and March 2023, indicating our severe need for crude oil supply from oil fields where NEPL has equity stakes,” Okeni disclosed.

The ERPCL representative, however, stated that despite the meetings, correspondences and communications with NNPCL over the past three years on the issues of crude oil supply, nothing was done.

Besides, he identified other key issues encountered by the refinery as the inability of NNPCL to assign any of the preferred fields to allocate crude to the company since it started having engagement with the management on August 18, 2021, pointing out that even with the options given to allocate crude to the refinery from ND Western, First Hydrocarbon and Seplat, nothing has happened till date.

“ERPCL also has a crude oil supply agreement with ND Western to lift crude oil from the Ughelli Pumping Station (UPS) owned by NEPL and operated by Shoreline.

“We have held several meetings with Shoreline and Heritage Oil and indicated our readiness to make modifications needed to offtake crude oil from the UPS but no progress has been made till date,” Okeni further disclosed.

On the way forward, he said NNPCL and other producers need to put loading infrastructure in place to allow for truck loading, decrying why Dangote would be getting 30,000bp because it opened up to the public while smaller refineries were not being served, which he likened to no respect for small people who can also grow the economy alongside the big players.

The representative of ERPCL is, therefore, seeking Kyari’s intervention as group CEO of NNPCL for NUIMS to give occurrence to the Seplat-ERPCL agreement to enable Edo Refinery to start lifting crude oil from Oil Mining License.

He described the past two years as frustrating for the establishment. “If we 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 to two percent of the daily crude oil production. Our lifting from the pumping station will even reduce pipeline losses.”

Okeni argued that the advantage of loading from NNPCL pumping station to the expert terminal is that it costs less because the cost of pipeline export terminal charges and loss will be saved which should make the modular refineries more competitive than the offshore refineries which come to the export terminal to take the crude thereby making cost-savings to trickle down to Nigeria consumers.

“If the smallest refinery is not getting crude, it will discourage investors in that area” Okeni said, contending that because of lack of crude, OPAC Refinery operates less than 3 percent of its installed capacity and Edo Refinery less than 10 percent of installed capacity.

He disclosed that Nigeria was losing millions of dollars following the inability of NNPCL to supply modular refineries over the past three years whose total installed capacity is less than 30,000bpd.

Economy

Naira Nosedives Further in parallel market

Published

2 days ago

September 14, 2024

Kayode Sanni-Arewa

The Naira continued its downward trend on Friday, depreciating to N1,660 per dollar in the parallel market.

This represents a slight decline from the N1,655 per dollar traded on Thursday.

In a similar vein, the Naira depreciated to N1,546.41 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday. According to data from FMDQ, the indicative exchange rate for NAFEM fell from N1,649.76 per dollar on Thursday, indicating a marginal appreciation of N103.35 for the Naira.

However, the gap between the parallel market and NAFEM rates widened significantly, increasing to N113.59 per dollar from N5.24 per dollar the previous day. This growing disparity highlights the ongoing instability in the foreign exchange market.

Economy

FCT, Ogun, Lagos receive 1,000 CNG kits

Published

2 days ago

September 14, 2024

Kayode Sanni-Arewa

The Federal Government says it has commenced distribution of fresh Compressed Natural Gas kits to some states of the federation in its drive to foster rapid adoption of CNG.

This was disclosed Friday by an official of the Presidential Compressed Natural Gas Initiative, Moses Onate, during an inspection of the CNG kit warehouse located in Ibafo, along the Lagos-Ibadan Expressway, Ogun State.

With the hike in fuel prices, many drivers claimed they have been struggling to keep their businesses afloat.

The exercise, which the Federal Government said could reduce the cost of transportation by over 40 per cent started in Abuja and Lagos.

Speaking on the distribution Onate noted that states like Lagos, Oyo, Kaduna, Ogun and the FCT would be getting 1,000 conversion kits to continue the conversion initiative.

Onate added that of the 1,000 kits made available to the warehouse, 450 have been distributed to Kaduna and Abuja while 550 would be distributed to Lagos, Ogun and Oyo.

He said, “As of this morning, 450 have gone out to Kaduna and Abuja. 550 will be going to Lagos, Oyo, and Ogun states today.”

He also said the FG had not got any negative feedback on the kits distributed previously.

According to him, there are up to 10 CNG conversion centres in Lagos State alone.

“This initiative will seriously help people as regards the cost in the sense that fuel is around a thousand naira now, but CNG is around N210/N230.

“The gross margin between what fuel is being sold for and CNG price will have a lot of positive impact on everybody. We will live to enjoy CNG,” he said.

In his reaction, a pipeline engineer at the warehouse, Austin Nwaodhu, urged motorists and vehicle owners to adopt the CNG initiative stressing that it offers a cheaper alternative to fuel because of its low consumption rate, and user-friendliness.

He added that CNG did not emit much fumes into the atmosphere which could cause harm to members of the public.

“CNG is a good initiative by the president that will help to bring down the cost of running a vehicle compared to petrol. It will bring down the cost of running our cars.

“It is friendly to the environment and does not emit fumes unlike petrol,” Nwaodhu stressed.

Economy

Petrol Price Unveiled As Dangote Refinery Begins Supply in Nigeria on September 15

Published

2 days ago

September 14, 2024

Kayode Sanni-Arewa

The much-anticipated arrival of Premium Motor Spirit (PMS), better known as petrol, from Dangote Refinery is set to take place on Sunday, September 15. According to sources cited by Businessday, the Lagos-based refinery is prepared to commence distribution of its refined petrol to marketers across Nigeria.

In preparation for the launch, marketers have been advised to dispatch their trucks to the refinery today (Friday) for loading. This significant initiative is expected to bolster the country’s fuel supply, reduce dependence on imports, and alleviate the existing challenges faced by consumers.

Despite the imminent entry of Dangote’s petrol into the market, Naija News reports that fuel prices are expected to remain stable for the time being. Initially, Dangote Refinery plans to supply 25 million litres of petrol daily through the Nigeria National Petroleum Company (NNPC) Trading Limited.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed readiness to procure PMS from Dangote Refinery, provided that the price is lower than their current acquisition costs. IPMAN President Abubakar Maigandi stated that members are keen to explore purchasing arrangements but await clarity on Dangote’s pricing structure.

“After a meeting with our members today, we are ready to buy petrol from Dangote Refinery as long as the price remains competitive,” Maigandi explained. He noted that NNPCL, the sole importer of petrol, currently sells to marketers at an average price of N875 per liter. Consequently, petrol is sold at N930 to N940 depending on sourcing conditions, with a depot price of up to N990 per liter.

Maigandi emphasized that if Dangote Refinery offers a more attractive price, there is no reason for marketers to avoid its products. “We have no issue with Dangote Refinery,” he affirmed.

This statement follows comments from Edwin Devakumar, Vice President of Dangote Industries Limited, who suggested that local petroleum marketers are hesitating to purchase from the refinery despite competitive pricing. During an X space session hosted by Nairametrics, he claimed that only 3 percent of local marketers have shown interest in the new petrol from Dangote.

As the launch date approaches, all eyes will be on the impact of Dangote’s petrol on the Nigerian fuel market and the potential shift in purchasing habits among local marketers.