Connect with us

Oil & Gas

REVEALED: Top 8 world’s largest oil refineries

Published

on

Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.

Nigeria’s Dangote Refinery with a producing capacity of 650,000 barrels per day, has been ranked among the top eight largest refineries in the world, data compiled from NS Energy and SK Energy have shown.

Oil refineries apply an industrial process that transforms crude oil into various refined products such as petrol, gasoline, diesel, kerosene, liquefied petroleum gas, and jet fuel, among others.

With a majority of the world’s largest oil refineries present in the Asia Pacific region, the US, China, Russia, Japan and India, Nigeria has now joined the league of countries with the world’s largest refineries.

Here are the top 8 world’s largest refineries:

Jamnagar Refinery, India:

Located in Gujarat, India, the Jamnagar Refinery is the world’s largest oil refinery in the world.

The refinery has a crude processing capacity of 1.24 million barrels per day (bpd).

Paraguana Refining Centre, Venezuela:

Established in 1949 with a processing capacity of 955,000 (bpd) is the second largest refinery in the world.

Ruwais Refinery, UAE:

Third on the list is Ruwais Refinery, United Arab Emirates.

With a processing capacity of 922,000 bpd, the Ruwais refinery is owned by ADNOC, through its subsidiary, The Abu Dhabi Refining Company (Takreer).

Ulsan Refinery, South Korea:

Ulsan Refinery in South Korea ranks fourth among the world’s largest refineries.

Owned by SK Energy, the refinery is located in Ulsan Metropolitan City in South Korea.

With a processing capacity of 840,000 bpd, the refinery produces LPG, gasoline, diesel, jet fuel and asphalt, and entered into operations in 1964.

Yeosu Refinery, South Korea:

Located at Yeosu city in South Jeolla Province of South Korea, the Yeosu refinery processing capacity is 800,000 bpd.

The refinery is operated by GS Caltex, a joint venture between GS Holdings and Chevron. The Yeosu refinery started operations in 1969.

Onsan Refinery, South Korea:

With a processing capacity of 669,000bpd, the Onsan Refinery is the sixth largest oil refineries in the world.

Located at Ulsan in South Korea, the refinery consists of a condensate fractionation unit (CFU) for producing additional naphtha.

Dangote Refinery, Nigeria:

With a processing capacity of 650, 000 bpd, the newly built Dangote refinery has now ranked seventh among world’s largest refineries.

Located in Lagos, the Dangote oil refinery is designed to produce up to 50 million litres of gasoline and 15 million litres of diesel a day.

Port Arthur Refinery, US:

The Motiva refinery is situated in Port Arthur, Texas, and is the largest oil refinery in North America.

With a processing capacity of 640,000 bpd, the Valero’s Energy refinery is the eighth largest refinery in the world.

The first processing units of the Port Arthur Refinery were built in 1902 by the Texas Company, later known as Texaco, and officially started running in 1903.

Refining oil in a country reduces such a country’s foreign sources for energy; promotes economic growth and improves foreign currency earnings.

 

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Oil & Gas

NUPENG, PENGASSAN write Tinubu, seek probe of alleged IOCs against Dangote Refinery

Published

on

Dangote Petroleum Refinery on Tuesday announced a further reduction in the prices of both diesel and aviation fuel to N940, and N980 per

The Nigeria Union of Petroleum and Natural Gas Workers, NUPENG and its Petroleum and Natural and Senior Staff Association, PENGASSAN, have written to President Bola Tinubu, demanding a high powered investigation into the allegation that the International Oil Companies, IOCs, are plotting to undermine and destabilize the Dangote Refinery and Petrochemicals.

In a written through the Chief of Staff to the President, Mr Femi Gbajabiamila, dated July 1, 2024, the oil workers demanded among others, that the findings of such investigation must be made public to ensure transparency and maintain public trust.

My greatest challenge Is creating opportunities to show that arts can be commercialised in many….0:00 / 1:07

The letter signed by the NUPENG’s General Secretary, Afolabi Olawale and his PENGASSAN’s counterpart, Lumumba Okugbawa, read “The leadership and members of our great Union and Association profoundly appreciate your commitment and dedication to restoring the economic growth and prosperity of our dear Nation and we are also fuly mobilized and committed to supporting al your laudable thoughts and hard decisions towards these lofty goals.

“Unfortunately, we are deeply concerned and shocked by the recent unusual allegations by the Dangote Refinery and Petrochemicals Company of a deliberate plot by some International Oil Companies (IOCs) to frustrate their business efforts and continued existence.

“These sabotaging actions reportedly include denying the Refinery crude oil supply and artificially inflating market prices of the crude oil to the Company, thereby forcing Dangote Refinery and Petrochemicals Company to source crude oil from other countries, even as far as the United States of America with attendant high operating costs and logistics.

“The Dangote Refinery is not only a critical National asset but also a beacon of hope for our energy security, economic growth, and employment opportunities. The economic benefits of a Local Refinery with such capacity as the Dangote’s to Nigeria, can never be overstated.

“This is why for several decades now, NUPENG and PENGASSAN have campaigned vigorously that Nigeria should make ti a pre-requisite condition that Companies that want to benefit from JVC arrangements with Nigeria, to set up a Refinery/Petrochemical Company ni Nigeria.

“Unfortunately, no sucessive Governments summoned enough political and patriotic courage to take that logical and pragmatic policy direction. The survival of companies that have braved ti up and invested hugely ni refining crude ni Nigeria thus saving our Nation from wasteful product importations that profit other countries and cost us forex, should be of great interest to us as a Nation because of the enormous economic benefits involved.

“Our demands are as follows: Immediate Investigation: The Federal Government should set up an independent panel ot investigate the claims of sabotage by some International Oli Companies. This investigation should be compreensive and transparent, ensuring that al parties involved are held accountable.

“Public Disclosure: The findings of this investigation must be made public ot ensure transparency and maintain public trust. Nigerians deserve to know the truth about the actions of these International Oil Companies and the impact on our National interests.

“Legal Action: Should the allegations be substantiated, we expect the Government to take decisive legal action against the entities involved. This must include sanctions, penalties, and any other measures necessary to deter future acts of economic sabotage.

“Support for Dangote Refinery: The Government should provide al necessary support to ensure the uninterrupted commencement and operation of the Dangote Refinery. This includes ensuring security and stability around the Refinery’s operations.

“Your Excellency Sir, we trust your courage and unwavering commitment to the Nigerian project and we believe that the Presidency wil take decisive action to safeguard the Dangote Refinery and ensure its successful operation for the benefit of our Nation.

“Protecting our National assets is our collective responsibility. Thank you for your attention to this matter.”

Source: Vanguard

Continue Reading

Oil & Gas

Reinstate 40% import duties on LPG cylinders, Operator urges FG

Published

on

Reinstate 40% import duties on LPG cylinders, Operator urges FG

One of the operators in the oil and gas sector, the Group Managing Director (GMD) of Techno Oil Limited, Mrs Nkechi Obi, has urged the Federal Government to reinstate 40 per cent import duties on Liquefied Petroleum Gas (LPG) cylinders.

She also urged the central authority to reverse its policies on the importation of Compressed Natural Gas (CNG) and LPG cylinders.

Obi made this appeal known during a panel session at the 2024 Nigeria Oil and Gas (NOG) conference in Abuja.

Speaking, Obi pleaded with the government to reverse the zero import duties placed on the importation of LPG cylinders and restore the initial 40 per cent import duties, to discourage importation.

According to her, such a policy reverser on LPG cylinders would encourage local producers.

Techno Oil is one of the leading operators in the LPG market in Africa boasting of 5 million annual capacity LPG cylinder manufacturing plant, an 8400mt LPG storage terminal and a 1000mt LPG bottling plant.

She said: “The unofficial explanation we are getting from some customs officers is that the Compressed Natural Gas (CNG) which the government wants to encourage its usage in Nigeria, has the same Harmonised System (HS) code with LPG.

“So, the import benefits placed on CNG equipment eventually affected LPG equipment; that is why they were tied together on the zero import duties.

“Harmonised System codes are commonly used throughout the import and export process for the classification of goods.

“For me, we don’t produce CNG cylinders in Nigeria because it involves advanced technology but we produce LPG cylinders here.

“For us to produce CNG cylinders, we have to change one or two machines, and we expect the government to encourage us to upscale our technology to 32, which we are planning to do,” she lamented.

Obi also called on the Federal Government to separate the LPG HS code from that of CNG, to ensure that importers of LPG pay higher import duties, and to enable the government to continue with its efforts to make CNG affordable in the country with zero import duties.

“The previous government protected those producing cylinders so that import will not overshadow local production; they did that to encourage local manufacturing but when this government came into existence, policy changed.

“We only enjoyed that policy for six months before it was scrapped and replaced with the new “zero import duties” policy.

“Definitely, we have to produce CNG cylinders and the government needs to consider those that will go into that production. But if government policy is killing LPG cylinder production that we are doing, it will be very difficult to enter into CNG cylinder production.

“So, if there is anybody who can venture into CNG cylinder production, we the producers of LPG cylinders are here to do that and it is in our plan.

“But we are not encouraged to do it because of what happened to us in the LPG cylinder production because of the frustrating policy that is encouraging its importation,” Obi added.

Source: Nigeria Tribune

Continue Reading

Oil & Gas

Dangote refinery: Operators seek FG intervention as marketers opt for fuel import

Published

on

Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.

Operators in the downstream oil sector, on Monday, called on the Federal Government to intervene by ensuring the provision of crude oil to the Dangote Petroleum Refinery as marketers now prefer to buy cheaper imported refined petroleum products rather than patronising Dangote refinery.

They also slammed the international oil companies operating in Nigeria for selling crude oil to Dangote refinery above the global market prices, describing this as “anti-country practice.”

This came as the Independent Petroleum Marketers Association of Nigeria explained that the reason marketers were shunning the diesel and aviation fuel produced by the Dangote refinery was that the products were higher in cost.

The National President, IPMAN, Abubakar Maigandi, stated this while reacting to claims by the Dangote refinery that it had sold about 3.5 billion litres of refined products to Europe and other countries because some marketers were importing dirty fuels into Nigeria.

According to Maigandi, the refusal of the President of the Dangote Group, Aliko Dangote, to collaborate with IPMAN is another factor affecting the $20bn refinery.

The PUNCH reported on Monday that the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, had accused international oil companies in Nigeria of plans to frustrate the survival of the new Dangote refinery.

Edwin said the Federal Government issued 25 licences for the construction of refineries in Nigeria, but only the Dangote Group delivered on its promise.

He, however, noted that more than 3.5 billion litres of Dangote diesel and aviation fuel had been exported to Europe by the refinery in the past few months, being 90 per cent of its output.

But the IPMAN leader, while speaking with one of our correspondents on Monday, blamed Dangote for the importation of diesel by operators, saying his (Dangote) diesel is more expensive.

Maigandi disclosed that Dangote did not heed the advice of marketers that the current price of diesel and aviation fuel be reduced to beat competitors in the market.

The IPMAN boss maintained that nobody would be encouraged to import the so-called dirty fuel if the products from Dangote refinery were cheaper.

“The major challenge is the cost of the Dangote diesel. We are looking for a reduction from him. He should bring it to a little bit lower rate.

“The fact that people bring in diesel from other countries into Nigeria is his fault. It is because of his price. You know I said earlier that he should bring his price down so that he would discourage importation by the other marketers. His price is higher. If it is lower, why should people buy outside?” the marketer stated.

The Dangote refinery official had accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority of granting licences indiscriminately to marketers to import dirty refined products into the country.

The NMDPRA has since stayed mute on this, ignoring several calls for its reaction to this allegation.

Edwin had said the NMDPRA continued to issue import licences at the expense of the nation’s economy and at the cost of the health of Nigerians “who are exposed to carcinogenic products.”

Edwin lamented that even though Dangote was producing and bringing diesel into the market, complying with the regulations of the Economic Community of West African States, “licences are being issued, in large quantities, to traders who are buying the extremely high sulphur diesel from Russia and dumping it in the Nigerian market.”

He reiterated that as much as a quarter of the petrol and diesel available in West Africa originated from the ports of Amsterdam, Rotterdam, and Antwerp, stressing that these fuels contain sulphur and other pollutants, such as cancer-causing benzene, in quantities up to 400 times the limits permitted in Europe.

Edwin said, “The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority to indiscriminately grant licenses for the importation of dirty diesel and aviation fuel has made the Dangote refinery expand into foreign markets.

“The refinery has recently exported diesel and aviation fuel to Europe and other parts of the world. The same industry players fought us for crashing the price of diesel and aviation fuel, but our aim, as I have said earlier, is to grow our economy.”

No deal

Meanwhile, the IPMAN president stated that Dangote refused to sign a deal with the independent petroleum marketers for the distribution of its products.

Despite efforts to enter into a business agreement with him, Maigandi said Dangote held on to multinationals whom he said were sabotaging his efforts.

“Again, we gave him a policy that he should involve independent petroleum marketers in direct purchases from him. Up till now, he didn’t do that.

“The idea is, immediately you hold independent petroleum marketers, definitely you are the one who is having the market of the country.

“We told him that he should allow independent marketers to start buying fuel directly from him, but he refused. He just holds on to all these multinational companies. These multinational companies will sabotage his efforts because they will tell him that they would buy, but if they buy a little from him, they will go outside to buy another one that is cheaper than his own,” he stated.

Maigandi said Dangote currently sells his refined products through MRS, some depot owners and other major marketers.

“But it is better he sells to us directly because anywhere he takes his product to, independent marketers are buying it there. And when we buy, those selling it in those places will also add their profit margin, making the product a bit higher. He should use independent petroleum marketers to sell his products,” Maigandi advised.

High crude price

Meanwhile, an official of the Dangote Group, who spoke on conditions of anonymity because he was not authorised to speak on the matter, said the importation of crude oil from the United States should be blamed for the diesel price.

While saying Dangote could not sell his products below the cost price, the official stated that international oil companies were denying Dangote access to crude oil to frustrate the refinery.

“If Dangote gets crude oil locally, there wouldn’t be any issue. You know Dangote is importing with dollars. So, there is no way Dangote will sell below the cost price. But these traders are importing dirty fuels from Russia at a cheaper price.

Related News
Crude supply: Modular refineries back Dangote, seek Tinubu’s intervention
Marketers distribute 25 million litres Dangote diesel
Dangote refinery plans 5.3bn litres fuel storage
“We keep importing crude from the US because the IOCs refuse to sell to us. That’s the problem. If IOCs could be selling to us, we wouldn’t have any crisis; we would be selling at a price everybody would be happy with. Look at what the dollar is saying now; if we are buying crude at a dollar that exchanges for N1,484, how much do you want us to sell? But if we are getting it in Nigeria, the cost will reduce and it will be cheaper.

“If the Federal Government allows us to buy in Nigeria, it will be cheaper. What we need to do is just to refine and sell. But in this case, we have to import from the US, so it’s very expensive. Some people are just playing politics with this thing to frustrate the refinery,” the Dangote Group official stated.

Our correspondent recalls that Aliko Dangote recently recounted how the refinery crashed the price of diesel in Nigeria from around N1,600 per litre to N1,000.

As of now, the price of a litre of diesel is around N1,200, an amount the independent petroleum marketers described as too high.

Recall that Dangote recently said Nigeria would no longer import any fuel by the time he begins the sale of PMS in the third week of July.

Marketers slam IOCs

Oil marketers lambasted the IOCs for raising the cost of crude oil to the Dangote Petroleum Refinery above the global market price by about $6/barrel, describing this as anti-country practices.

The dealers in the downstream oil sector under the aegis of the IPMAN and the Petroleum Products Retail Outlets Owners Association of Nigeria declared that the Federal Government should mandate the IOCs to supply crude to the refinery.

Dangote Group’s Edwin had on Monday said the IOCs were deliberately and willfully frustrating the refinery’s efforts to buy local crude by hiking the cost above the market price by $6, thereby forcing the refinery to import crude from countries as far as the US, with its attendant high costs.

He also talked about the importation of dirty fuel into Nigeria due to the licences issued by the NMDPRA

The NMDPRA has since remained silent about this accusation despite repeated attempts to get the authority’s position on the claims.

When our correspondent contacted the NMDPRA spokesman, George Ene-Ita, on Sunday, he requested details about the claims of the Dangote official. This was sent to him, but he did not reply.

On Monday, Ene-Ita told our correspondent that the agency was preparing a reaction in a statement that would be sent to the media. He has yet to do so until the time this story was filed.

Reacting to the revelations by the Dangote refinery official on the hike in domestic crude oil price by IOCs, the President, PETROAN, Billy Gillis-Harry, declared, “Clearly, that is anti-country! Because when you are doing business in a country, the country’s welfare, well-being and economic growth should be your business.

“That is why some multinationals said they were packing out of Nigeria when they had exploited all the weaknesses and lukewarm policies that Nigeria has, which empowered them, without them empowering us and not leaving technology transfer to enable us to continue running such businesses.

“So it is a wake-up call for the Nigerian government, not just in the oil and gas sector, but especially in the Trade and Investment sector, to insist on new rules on how to engage in doing business in Nigeria.”

The Public Relations Officer, IPMAN, Chief Ukadike Chinedu, said the hike in crude oil price by the IOCs should be resisted, stressing that since the commencement of in-country refining of crude at the Dangote refinery, some refined products had been stabilised in terms of pricing and availability.

He said, “The government should not allow such to happen. Why should you raise the price of crude for local refiners? That shouldn’t be accepted. The government has to intervene.

“The continued support of the Dangote refinery by the Federal Government in terms of supplying crude oil and other necessary assistance will further bring down prices of petroleum products. As I speak with you, diesel is sold between N1,000 and N1,200/litre and the product is available now. Before Dangote came on board, diesel rose to N1,600/litre.”

Reacting to Dangote’s claim of 3.5 billion litres of fuel export, Gillis-Harry stated that though he could not confirm the export volume declared by the Dangote refinery official, crude should be sold in naira to the plant to ensure some guaranteed volumes of supply in-country.

“If Dangote says they have exported over 3 billion litres of diesel and aviation fuel, we don’t keep their books, so there’s no way we can confirm that. However, that refinery is operating in a free zone, meaning that the operation is not in-country.

“This is why we asked that the refinery should buy Nigerian crude oil. And if he buys it in Nigerian naira, at least that will give us leverage to insist on what part of that production should be for domestic consumption,” the PETROAN president stated.

On his part, Ukadike stated that members of IPMAN were getting adequate diesel supply from the Dangote refinery, adding that there had not been complaints of aviation fuel scarcity since the plant started producing the commodity.

He said, “You know that diesel rose to over N1,600/litre but when Dangote started producing it came down to N1,200 and since then the refinery has been moving the price between N1,000 and N1,200/litre.

“So I’ll say there is adequate supply of diesel from the plant and the price has been stable, while we have not experienced diesel scarcity. Marketers are also loading comfortably from Dangote’s depot. For aviation fuel, I’ve not heard the airline operators complain that it is not available.”

NUPRC reacts

When contacted on Monday and asked to state what the government was doing to provide crude to Dangote refinery, the spokesperson of the Nigeria Upstream Petroleum Regulatory Commission, Olaide Shonola, promised to revert with responses from the designated department.

Although she had yet to respond up till when this report was filed, Shinola pointed out that the issue had been recurring and efforts were being made to address it by the NUPRC.

Recently, while responding to the demand for crude by domestic refiners, NUPRC’s Chief Executive Officer, Gbenga Komolafe, promised to ensure that crude oil was supplied to the operators.

He stated that in compliance with the provisions of Section 109(2) of the Petroleum Industry Act 2021, the NUPRC in a landmark move, had developed a template guiding the activities for Domestic Crude Oil Supply Obligation.

“The commission in conjunction with relevant stakeholders from NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery came up with the template for the buy-in of all.

“This is in a bid to foster a seamless implementation of the DCSO and ensure consistent supply of crude oil to domestic refineries,” Komolafe had stated.

Source: The Nation

Continue Reading

Oil & Gas

FG offers 17 new oil blocks for bidding

Published

on

FG offers 17 new oil blocks for bidding

The Federal Government, on Tuesday, announced the addition of 17 deep offshore oil blocks to the 2024 Licensing Round for oil fields in Nigeria.

Recall that some deep offshore blocks were recently put on offer for the 2022/23 mini-bid round and other blocks which cut across onshore, continental shelf and deep offshore terrains were also put on offer for the Nigeria 2024 Licencing Round.

Precisely on May 8, the government invited investors to bid for 12 oil blocks and seven deep offshore assets in the 2024 marginal fields bid round.

Also on June 12, 2024, it was reported that the Federal government had increased the number of oil blocks on offer in the 2024 marginal bid round.

The Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, disclosed this at the pre-bid conference for the 2024 licencing round in Lagos.

Providing updates on the 2022/2023 and 2024 licencing rounds, Komolafe, in a statement he signed and issued in Abuja on Tuesday, said 17 deep offshore blocks have been added to the 2024 Licensing Round.

He said, “In pursuit of the commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the commission has been working assiduously with multi-client companies to undertake more exploratory activities to acquire more data to foster and encourage further investment in the Nigerian upstream sector.

“As a result of additional data acquired in respect of deep offshore blocks, the commission has added 17 deep offshore blocks to the 2024 Licensing Round. Further details on the blocks can be found on the bid portal.”

Komolafe further stated that “by the published guidelines, we had earlier indicated that some of the assets on offer should be applied for as clusters, namely: PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001. Bidders are hereby advised that they may, at their option, bid for those blocks as clusters or as single units.”

For clarification, he said bidders should refer to the Frequently Asked Questions Sections of the 2022/23 and 2024 Licensing Round portals, or contact the upstream regulatory agency.

The NUPRC boss also stated that to allow interested investors to take advantage of the expanded opportunities, the 2024 Licencing Round schedule had been amended.

He said, “Registration/submission of pre-qualification documents which was initially scheduled to close on June 25, 2024, has been extended by 10 days and will now close on July 5, 2024.

“Data access/data purchase/evaluation/bid preparation and submission which was initially scheduled to open on July 4, 2024, and close on 29/11/24 will now start on July 8, 2024, and close on 29/11/24 as previously scheduled.

“All other dates in the published 2024 licencing round schedule remain the same unless otherwise communicated.”

He stated that to vacate entry barriers, the commission had sought and obtained the approval of President Bola Tinubu, who, as petroleum minister, approved attractive fiscal regimes and also minimised entry fees for both licencing rounds by putting a cap on the signature bonus payable for the award of the acreages.

“Consequently, it is necessary to ensure that the same bid criteria (in addition to the uniform signature bonus criteria) are applicable for both licencing rounds, to promote transparency and provide a level playing ground for all bidders.

“Since the criteria for the award of the oil blocks are now much more attractive than they initially were during the 2022/23 Mini Bid Round, it is in the interest of equity and fair play to give all investors the same opportunity to bid for the assets,” Komolafe stated.

Based on this, he declared that all blocks in the 2022/23 and 2024 Licencing Rounds were now available to all interested investors the websites developed for the exercise by the NUPRC, adding that the 2022/23 Mini Bid Round registration phase had been reopened to new applicants.

“The public is therefore invited to take advantage of this development and attractive entry terms and conditions and participate in the exercise.

“However, all the pre-qualified applicants published on the 2022/23 Mini Bid Round portal will not be required to go through a new pre-qualification process, as their technical submissions remain valid and eligible even for the 2024 Licencing Round.

“They may, however, wish to re-submit new commercial bids to take advantage of the more attractive criteria applicable to both licencing rounds and revise their bid bonds to adapt to the new bid criteria. They are also free to bid for blocks on offer in the 2024 Licencing Round,” Komolafe stated.

Source: The Punch

Continue Reading

Oil & Gas

Crude supply: Modular refineries back Dangote, seek Tinubu’s intervention

Published

on

Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.

Modular refineries, on Sunday, confirmed the concerns raised by Africa’s richest man, Aliko Dangote, on the fact that some mafias in the oil sector were bent at stopping in-country refining of crude oil for the production of Premium Motor Spirit, popularly called petrol, and other refined petroleum products.

Operators of modular refineries stated that they had raised this concern severally in the past but received no positive feedback, stressing that the Chairman of Dangote Petroleum Refinery just re-echoed it last week.

They spoke to our correspondent through their umbrella association, Crude Oil Refinery Owners Association of Nigeria, while reacting to Dangote’s recent revelation on the matter.

CORAN is a registered association of modular and conventional refinery companies in Nigeria. Modular refineries are simplified refineries that require significantly less capital investment than traditional full-scale refineries.

The Publicity Secretary, CORAN, Eche Idoko, said, “You can see that Dangote has raised similar concerns just as we’ve been saying all along about the mafias in the oil sector. These merchants have held the country hostage, especially in the area of our domestic petroleum products’ supply and it is crippling the whole economy.”

Last week, Dangote revealed that both local and international cartels, which he described as “mafia”, made repeated attempts to sabotage the $19bn Dangote Petroleum Refinery project located in Lagos.

“Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact,” he said.

Dangote, who described himself as a fighter, said they tried all sorts to stop him. Dangote spoke at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.

“As a matter of fact during the COVID period, some of the international banks were looking forward to making sure that they push us into default of our loans so that the project will just be dead. And that didn’t happen with the help of banks like Afreximbank,” the oil firm’s boss had stated.

CORAN explained that the rise in food inflation in Nigeria could also be attributed to the hike in the pump prices of petroleum products, especially PMS, stressing that in-country refining would have helped in tackling these costs.

“The reason why this government hasn’t been able to tackle inflation, especially food inflation in the country is because of the prices of petroleum products. And you can’t keep playing the ostrich,” Idoko stated.

He added, “Yes we understand that if you are in OPEC you can decide to peg the price of your crude to OPEC standard, but in all OPEC-member countries, including Saudi Arabia, Russia, etc, they all have special arrangements internally for their people.

“They have special arrangements for domestic use of crude. Even South Africa has crude oil reserves, but where is Nigeria’s reserves? And I don’t mean oil reserves in the ground that are yet explored, but reserves that are stored somewhere.”

On June 3, 2024, The PUNCH reported that the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, declared that Nigeria would continue to comply with crude oil production adjustments approved by the Organisation of Petroleum Exporting Countries.

Lokpobiri, who spoke at the 37th OPEC and OPEC+ meeting, had explained that the oil production adjustments by the global oil cartel were meant to stabilise the market.

“Nigeria remains unwavering in its commitment to the agreements made under the Declaration of Cooperation. Our adherence to these production adjustments is crucial for maintaining market balance and supporting global efforts toward sustainable oil market stability,” the minister had stated in a statement.

But CORAN argued that the mafias in the oil sector were fighting Nigeria from attaining self-sufficiency in the domestic refining of crude oil because these persons were profiting from petroleum products’ importation into the country.

“Who is this present government talking with on issues that has to do with supply, energy efficiency and others? Who are they talking with, who are the stakeholders? We have made efforts to meet with the President severally, but every attempt was blocked. Who are those benefitting from the current situation in the country?” the association’s spokesperson stated.

Idoko added, “And if they don’t believe us because we are an association of smaller refineries, at least they have heard Dangote say it now. Who are these people fighting the self-sufficiency in the refining of petroleum products in Nigeria? The Minister of Petroleum, who is actually the President, should speak about this.

“He should tell us what is his principle. Is he looking at creating self-sufficiency in domestic refining of petroleum products or that he wants to continue the regime of petroleum importation? If it means the presidency speaking to Nigerians directly, telling us what their policy thrust is on this matter, then fine.”

Dangote had also during his speech revealed that international oil companies denied him access to their crude because they did not think he could succeed with the 650,000 barrels per day capacity refinery.

“In a system where, for 35 years, people are used to counting good money, and all of a sudden, they see that the days of counting that money have come to an end, you don’t expect them to pray for you. Of course, you expect them to fight back.

“And I think that is the process that we’re now really going through. But the truth is that, yes, the country, the sub-region, and also the continent, of sub-Saharan Africa, need this refinery. So, you expect them to fight through non-supply of crude, non-purchase of the product, but I think it’s all temporary. We’ll get there,” he added.

Also recall that The PUNCH exclusively reported earlier this month that international financiers that were meant to fund the construction of about 20 modular refineries in Nigeria had withheld their funds due to the challenge of getting guarantees for crude oil supply to the facilities when they are completed.

Producers of crude oil in Nigeria, who are largely international oil companies, have not been able to provide guarantees to assure the financiers that crude would be supplied to the modular refineries when the plants are set to produce refined petroleum products.

Based on this, funders of the facilities have held onto their funds pending when the Federal Government would be able to impress it on IOCs to provide the guarantees required for crude oil supply to modular refiners.

Although Nigeria prides itself as the largest crude oil producer in Africa, it exports bulk of its crude to earn foreign exchange, starving domestic refiners who find it tough to source the United States dollar required for the purchase crude.

Nigeria currently has 25 licensed modular refineries. Five of them are operating and producing diesel, kerosene, black oil and naphtha. About 10 are under various stages of completion, while the others have received licences to establish.

Operators of modular refineries had told our correspondent that aside from the five that were in operation currently, the remaining plants were embattled due to the major challenge of crude oil unavailability, a development that has stalled funding from financiers.

“Only about five of our members have completed their refineries. The others are having a major challenge. This challenge is that the people who are supposed to finance them have not disbursed financing for construction because they want some level of guarantee.

“A guarantee that if they finish the refinery, they are going to get feedstock, which, of course, is crude oil,” Idoko had stated.

Efforts to get the Nigerian Upstream Petroleum Regulatory Commission, on Sunday, to speak on the concerns raised by the refinery operators were not successful.

The spokesperson of the commission, Olaide Shonola, could not be reached, as her number was not connecting, while she had yet to respond to a text message sent to her on the subject up till when this report was filed.

However, while responding to the demand for a Conditional Term Sheet by the financiers of modular refiners earlier, the commission stated that it received figures on the production capacities of indigenous refineries and had presented them to crude oil producers to make the commodity available.

NUPRC’s Chief Executive Officer, Gbenga Komolafe, while reacting to a question by our correspondent on the matter, however, stated that the commission would not guarantee supply to refineries that had yet to come into existence.

“This still borders on the implementation of the domestic crude oil obligation. First of all let me make it clear that establishing a refinery of whatever capacity, whether it is a modular refinery or the bigger sized refinery, is a commercial engagement. So the commission can’t come in to give any form of guarantee. I need to make that clear.

“However, the regulator will only implement the provisions of the PIA given that all the regulatory activities of the commission are expected to be in compliance with the provisions of the law. So as it relates to guaranteeing feedstock to refiners, that is enshrined under section 109 of the PIA.

“And what we have just done in furtherance of that provision is that we have put in place a regulation that has to do with domestic crude oil obligation. So in the implementation of that provision, what we do is that we receive the figures on the domestic refining capacity from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

“And once we receive that, our development and production department factors the numbers against the capacities of the various producers within the upstream sector and makes it obligatory for them (crude producers) to meet those numbers, thereby guaranteeing that volume of supply to existing licensed and operating refineries, not refineries that have not come into existence,” Komolafe had explained.

The NUPRC boss had stressed that “we do not guarantee crude for financing of refineries that have not come into existence.”

Recall that the commission recently promised to ensure that crude oil was supplied to domestic refiners

It stated that in compliance with the provisions of Section 109(2) of the Petroleum Industry Act 2021, the NUPRC in a landmark move, had developed a template guiding the activities for Domestic Crude Oil Supply Obligation.

“The commission in conjunction with relevant stakeholders from NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery came up with the template for the buy-in of all.

“This is in a bid to foster a seamless implementation of the DCSO and ensure consistent supply of crude oil to domestic refineries,” Komolafe had stated.

Source: The Punch

Continue Reading

Oil & Gas

Dangote reveals how oil mafia tried to stop establishment of Dangote Refinery

Published

on

The founder of Dangote Group, Aliko Dangote, has revealed that both local and international criminal organisations, which he described as “mafia”, made repeated attempts to sabotage his $19bn refinery project located in Lagos.

Speaking at the Afreximbank Annual Meetings, Dangote likened the oil cartels to a mafia stronger than the drug mafia hell-bent on maintaining their grip on the industry.

“Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact,” he said.

Dangote, who described himself as a fighter, said they “tried all sorts” to stop him.

“But I’m a person that has been fighting all my life. You know, so I think it’s part of my life to fight,” he said.

He added, “As a matter of fact during the COVID period, some of the international banks really were looking forward to making sure that they push us into default of our loans so that the project will just be dead. And that didn’t happen with the help of banks like Afreximbank.”

Dangote also revealed that he has paid off $2.4bn of the $5.5bn borrowed for the Lagos-based refinery.

Dangote also unveiled plans to diversify into the steel sector, aiming to utilise solely Nigerian-produced steel and achieve self-sufficiency.

Dangote Refinery recently rescheduled the launch of its petrol sales to July 10-15, pushing back its initial June target due to “minor” logistical issues.

Source: CHAMPION NEWS

Continue Reading

Top Stories