AIPCC Energy Limited is displeased by the NNPC’s lack of consistency in supplying crude oil to its refinery.
The company says the NNPC’s failure to meet up with the task is causing a significant shortage in its productivity.
This is coming after the nation’s president, Bola Ahmed Tinubu, issued a directive stating that the NNPC should not limit its supply of crude oil to just the Dangote refinery but also to other modular refineries across the country.
In a recent statement, the company’s management, which operates the Edo Refinery and Petrochemicals Company Limited (ERPCL) – a fully functional 1,000 barrels per day stream crude facility said it was faced with significant challenges due to the NNPC’s inability to live up to its task.
AIPCC’s representative, Segun Okeni, noted that despite the company’s existing supply agreements with Seplat and ND Western since 2022, the company has been unable to function at full capacity, adding that bureaucratic bottlenecks have prevented the refinery from accessing the much-needed resources it would have received from the aforementioned entities.
Okeni, who described these challenges as a major setback for the company’s productivity, lamented how the Group Chief Executive Officer of NNPC, Mele Kyari, failed to respond to a letter sent to him by ERPCL in a bid to curtail the trend. He said this happened despite the company’s effort to keep constant communication with the NNPC boss over the past three years.
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 met 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.”
While describing the past two years as frustrating for the company, Okeni further suggested that NNPC and other crude oil suppliers work towards putting loading infrastructure in place to allow for truck loading, adding that loading from the NNPC pumping station to the export terminal would help reduce cost and make the modular refineries more competitive than the offshore refineries that come to the export terminal to take the crude.
The ERPCL representative added that this could help trickle down costs for Nigerian consumers.
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.
“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,” he added.
