The management of AIPCC Energy Limited, operators of the Edo Refinery and Petrochemicals Company Limited (ERPCL), has raised concerns over the persistent lack of crude oil supply, despite being a fully operational refinery with a capacity of 1,000 barrels per day.
The refinery, based in Edo State, has been struggling to operate at its full capacity due to the unavailability of crude oil, despite directives from President Bola Tinubu that the Nigerian National Petroleum Company Limited (NNPCL) should supply crude oil to the Dangote Refinery and other modular refineries in the country.
Speaking to journalists in Benin City, Segun Okeni, a representative of the refinery, highlighted the significant challenges the facility faces due to the lack of crude oil. He mentioned that the refinery had entered into crude oil supply agreements with Seplat and ND Western as far back as 2022, but bureaucratic delays have prevented the refinery from accessing the necessary crude oil.
Okeni detailed the refinery’s efforts to secure crude oil, including a meeting with the Group Chief Executive Officer of NNPCL, Mele Kyari, in August 2021, and subsequent correspondences and inspections by NNPCL officials. Despite these efforts, no crude oil has been supplied to ERPCL, which has significantly hampered its operations.
He explained that ERPCL has also faced issues with the NNPCL’s inability to allocate crude from preferred fields, despite multiple engagements since August 2021. Even with agreements in place to lift crude from fields operated by ND Western, First Hydrocarbon, and Seplat, the refinery has yet to receive any supply.
The company also pointed out that although ERPCL has a Crude Oil Supply Agreement with ND Western to lift crude from the Ughelli Pumping Station, owned by NEPL and operated by Shoreline, no progress has been made. Okeni lamented that despite ongoing discussions and readiness to make necessary modifications to the refinery to offtake crude, nothing has been accomplished.
Okeni expressed frustration over the past two years, noting that the NNPCL’s failure to support smaller refineries like ERPCL undermines local investment and discourages foreign investors. He argued that the total daily demand of all modular refineries is less than two percent of Nigeria’s daily crude oil production, and meeting this demand would help reduce pipeline losses and make modular refineries more competitive.
Okeni emphasized that the smallest refineries, such as the OPAC Refinery, are operating at less than 3% of their installed capacity, while the Edo Refinery is operating at less than 10%. This situation, he contends, is causing Nigeria to lose millions of dollars due to the NNPCL’s inability to supply crude oil to these modular refineries, whose total installed capacity is less than 30,000 barrels per day. Okeni called for the intervention of NNPCL’s Group CEO to ensure that the Seplat-ERPCL agreement is honored, allowing the refinery to start lifting crude oil from Oil Mining License fields.