Mr. Chikezie Nwosu, Chief Executive Officer of WalterSmith Petroman Oil Limited, the operator of the new refinery, has disclosed that the newly commissioned 5,000 BPD Refinery will produce 271 million liters of petroleum product annually.

This information was disclosed by Nwosu in his address during the commissioning ceremony of the 5,000 BPD Modular Refinery, in the Ibigwe Field, Imo State.

Mr. Nwosu disclosed that the refinery will refine 5,000 barrels per day of crude oil, and produce 271 million liters of petroleum product annually.

He added that since it commenced the evacuation of products in November 2020, it has already delivered 5 million liters of product into the Nigerian market.

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While speaking at the ceremony, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr. Simbi Wabote explained that the next phase of the project will be a 45,000 BPD Refinery, with a completion timeline of 24-30months. When completed, the Refinery will utilize 16 million barrels of crude oil annually.

He stressed that this is an impressive and avid step towards the board’s mandates of developing in-country capacities/capabilities to add value to Nigeria’s hydrocarbon resources.

The ES of NCDMB disclosed that the Federal Government’s target is that at least 10% of Nigeria’s crude and condensate production should be refined through modular refineries.

What you should know

The refinery is one of the government’s investments in the oil industry, as FG’s investments in ongoing modular refinery projects so far amount to 80,000 BPD of combined modular refining capacity.

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WalterSmith Petroman Oil Limited owns 70% of the Refinery being commissioned today, while the Nigerian Content Development and Monitoring Board on behalf of the Federal Government of Nigeria hold 30% equity of the refinery.

However, it is important to note that the Federal Government of Nigeria signed a Memorandum of Understanding (MoU) with the Niger Republic on the transportation and storage of petroleum products.

Why this matters

The refinery is a giant step towards the development of capacities and capabilities in the oil industry, especially in terms of local production of refined petroleum products.

The Refinery will strengthen local and indigenous investment in the oil industry and boost the production capacity of refined crude products in the country.

According to OPEC, Nigeria’s petroleum products import of $58.75 billion, outstrips the country’s crude oil export of $45.12 billion, at the end of 2019. This development is expected to reduce the importation of petroleum products in Nigeria.

The Nigerian National Petroleum Corporation (NNPC) is set to commence the second phase of the rehabilitation of the Port-Harcourt Refinery in the first quarter of 2021.

According to the African Business Intelligence Report, NNPC is working hard and round the clock towards ensuring that four refineries are up and running by 2023.

The Group MD of NNPC, Mallam Mele Kyari made this disclosure and said, “The vision of revamping the pipelines is in tandem with the Refineries Rehabilitation Project, which we have promised to deliver by 2023. I am happy to announce that the funding challenge which had stalled the second phase of the rehabilitation of the Port Harcourt Refinery has been resolved. The contract for the second phase will soon be awarded and work will commence in Q1 of 2021.”

According to Mallam Kyari, a lot has been put in place to boost exploration and production with a view of achieving 3m barrels per day production target.

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What you should know

Nairametrics had reported that the first phase rehabilitation was to take place 2 years ago and to be executed by Milan-based Maire Tecnimont S.p.A, in collaboration with its Nigerian affiliate, Tecnimont Nigeria.

It was expected that after the phase-1 of rehabilitation, the Refinery complex should be able to reach its 60% capacity utilization.
Further rehabilitation of the PHC refinery is expected to enhance its production capacity to meet its production targets

Putting the refineries in good shape to produce optimally would stem down the huge imports of the refined petroleum products, considering that about 90% of the refined petroleum products consumed in Nigeria are imported.

It appears petrol scarcity is not in sight, at least during the coming yuletide season and in the foreseeable future.

This is according to the Petroleum Products Stock Data, compiled by the Petroleum Products Pricing Regulatory Agency (PPPRA).

According to the data available on the PPPRA website, the current stock level of Premium Motor Spirit (PMS), also known as petrol or gasoline, stands at 2.705billion litres.

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• Of the total litres, Land-based Stock accounted for 1.243billion litres, representing 46%.
• Marine Stock accounted for 1.462billion litres, representing 54% litres.

Further checks indicated that NNPC and two other marketer’s association – MOMAN and DAPPMA, are in charge of the product. They operate in five designated areas – Lagos area, Port-Harcourt area, Calabar area, Warri area, and Kaduna area.

• Of the 1.24 billion Land-based Stock, NNPC owns 604.7 million litres, representing 49%.
• DAPPMA owns 545.1 million litres, representing 44%.
• Major Marketers own 93.7 million litres, representing 8%.

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Of the Marine stock of 1.46 billion litres,

• 1.25billion litres belongs to NNPC and it’s offshore, while 215.59 million litres is total Jetty at Berth.
• DAPPMA owns 131.38million litres of the total Jetty at Berth, representing 61%.
• Major Marketers own 42.77million litres, representing 20%.
• NNPC owns 41.44million litres, representing 19%.
• Lagos area has the highest closing stock (596.20million litres), followed by Port-Harcourt area (212.43million litres), Warri area (198.29million litres), Calabar area (58.91million litres), and then Kaduna area (57.97million litres).

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• As at the release of the data on November 22 by PPPRA, 10 out of 11 vessels discharged the 215.59 million litres at different Jetties, with the other vessel given nomination to discharge.

What this means

With the national average daily consumption of PMS put at 56 million litres, it means the current stock level of 2.71 billion litres will sustain the country for at least 48 days, all things being equal.

The only worry is affordability, considering the recent hike in petrol depot price by the Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

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What you should know

Nairametrics recently reported that the recent adjustment of the ex-depot price of petrol may result in increased pump price of the product. PPMC increased the ex-depot price of the product to N155.17 per litre from N147.67 per litre.

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The ex-depot price is the price at which PMS is sold by the PPMC to marketers, which indicates that marketers would be dispensing the product to motorists at a price higher than N155.17 per litre. Hence, the average current pump price of PMS is N170 per litre.