Edo refinery decries NNPCL’s failure to supply crude

The management of AIPCC Energy Limited, operators of the Edo Refinery and Petrochemicals Company Limited, has raised alarm over the persistent lack of crude oil despite being a fully functional 1,000 barrels per day stream crude oil refinery.

The management on Saturday said despite the directive by President Bola Tinubu 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 is yet to get any crude from the relevant authorities.

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 said the refinery, which requires 1,000 barrels per day stream crude, can barely function at full capacity.

Okeni 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 stated that in 2021, ERPCL’s letter addressed to the Group Chief Executive Officer of NNPC, Mele Kyari, after having a series of meetings and constant communication with him was not attended 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.”

Okeni added, “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.”

The ERPCL representative, however, noted that despite these meetings, correspondences, and communications with NNPC over the past three years on the issues of crude oil supply, nothing has been done.

On the way 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 said the advantage of loading from NNPC pumping station to the export terminal is that it costs less, noting that the cost of pipeline export terminal charges and loss will be saved.

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.

He added, “If the smallest refinery is not getting crude, it will discourage investors in that area. Due to lack of crude, the Edo refinery operates less than 10 per cent of installed capacity.

“Nigeria loses millions of dollars following the inability of NNPC to supply crude to modular refineries over the past three years, whose total installed capacity is less than 30,000 barrels per day.”