Refineries to operate at 90% capacity after ongoing Turn Around Maintenance – NNPC


The General Manager, Services, of the Nigerian National Petroleum Corporation (NNPC), Mr Abubakar Muhammed, said the nation’s four refineries would operate at 90 per cent capacity on completion of the ongoing Turn Around Maintenance.

Muhammed gave the assurance at the ongoing four-day International Conference of the Society of Petroleum Engineers (SPE) and exhibitions on Tuesday in Lagos.

The 38th edition of the conference has the theme “Natural Gas Development and Exploitation in an Emerging Economy Strategies, Infrastructure and Policy Framework.”

The NNPC director said that out of the 90 per cent production capacity of the country’s output of crude production, about 40 would be channeled to the production of petrol.

He said that additional refineries would be expected on the long and short term to increase the country’s refining capacity and to boost domestic consumption.

Muhammed said that the Federal Government was committed to the gas development programmes and revival of its infrastructure.

He said that the nation needed renovation and Petroleum Industry Bill (PIB) that would define the country’s future oil and gas production and generation.

“The PIB has been in the pipeline for 15 years. We are hopeful that the present legislature will address the bill,” he said.

He said that crude oil theft had been a major challenge in the country, adding that the decline had impacted on the average sale of government equity crude, with an average joint venture cash call budget of about $600 million per month.

According to him, the drop of earnings from government crude to an average of about $460 million potential presents a yearly funding shortfall of about $4.8 billion for the sector.

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“This comes at a time when the cash call budget has remained unattainable in the last few years.

“Management of funding is our most immediate challenge and innovative financing approach is currently being developed to address the issue.

“Another challenge is the development of shale oil in Nigeria’s largest market, U.S.; this has forced Nigeria to look for alternative market in Asia.

“In spite of these challenges we are focusing on strategic realignment of our crude oil exports to graphically and more direct and user transactions in sustainable markets.”

Muhammed said that crude theft and pipeline vandalism and reduction in crude oil exploration activities had impacted negatively on production in the last four years from 2010 to 2014.

He said that the significant production interruption was now a regular feature in Nigeria’s production profile, with an average of 250,000 bpd being deferred.

“At the price of $100 per barrel, this amounts to a loss of about $9.1 billion yearly.

“Crude theft from January to April 2015 stood at 39.3 million barrels or loss of $3.9 billion at an average crude price of $97.9 per barrels.

“The solution lies with setting up of a critical infrastructure force with accountability measures, with a continuation of enlightenment, empowerment and enforcement of anti-sabotage laws.

“In a bid to address the current sub-optimal performance of domestic refineries, a new rehabilitation strategy has been adopted,” he added.

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