With Deteriorating Assets, Nigeria’s Refinery Throughput Falls 1,800% in 10 Years

Emmanuel Addeh in Abuja

As Nigeria’s refineries began to pack up as a result of prolonged lack of maintenance, the country’s daily oil refining throughput fell sharply by about 1,800 per cent between 2011 and 2022, a THISDAY analysis of industry data has revealed.

While as at 2011, Nigeria still managed to refine 108,000 barrels per day in-country, data obtained from Statista, a global portal which provides data on the digital economies, industrial sectors, consumer markets, and macroeconomic developments, indicated that the number fell to 6,000 bpd in 2022.

In the downstream petroleum industry, throughput is the amount of product that moves through a particular facility or a given set of facilities during a period of time.

Although traditionally, Nigeria before the collapse of its petroleum refineries, was able to refine 450,000 barrels per day from its three refining facilities in Port Harcourt, Rivers State, Warri in Delta State as well as in Kaduna, Northwest Nigeria, data from the portal showed that it fell to zero in 2020.

In other years, between 2010 and 2022, it indicated that in-country refining was 96,000 barrels per day in 2010; 108,000 in 2011; 92,000 in 2012 and 97, 000 barrels per day refining throughput in 2013.

But from 2014, the capacity for refining products within the country quickly deteriorated even faster, as the refining of petrol, diesel, kerosene and other products fell to 64,000 barrels per day during that year.

Recently, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), advised on the adoption of the Nigeria Liquefied Natural Gas (NLNG) model for running the nation’s four refineries when they finally come on-stream, rather than being run by the Nigerian government.

The NLNG is an incorporated joint venture owned 49 per cent by the government represented by the Nigerian National Petroleum Company Limited (NNPC); 25.6 per cent by Shell Gas; 15 per cent by TotalEnegies & Electricité, and 10.4 per cent by Eni International.

The ownership structure allows for an independent board and  management of the NLNG, making it one of Nigeria’s most profitable companies in the gas space.

Speaking at the association’s 7th triennial delegates conference in Abuja, President of PENGASSAN, Festus Osifo, argued that with the NLNG model, Nigeria can quickly surmount the challenges associated with running refineries in the country.

But the throughput data further revealed that in 2015, products refining within Nigeria fell to 22,000 bpd; it was 62,000 bpd in 2016; throughput however rose to 81,000 bpd in 2017; but again slumped to 35,000 bpd in 2018.

From 2019, the situation got even worse, when in-country refining fell to 7,000 bpd; it was zero in 2020; 3,000 bpd in 2021 and 6,000 bpd in 2022.

Last month, the Nasarawa State Governor, Abdullahi Sule, alleged that under the last Muhammadu Buhari-led administration alone, $19 billion was wasted on the rehabilitation of the state-owned refineries without results, the same amount Dangote had invested in its 650,000 bpd refinery.

However, in a note, NNPC said all its financial statements from 2015 to 2022 could be found in the office of the Auditor General of the Federation (AuGF).

It explained that the totality of the spending, inclusive of salaries and wages of workers could not be compared with what it cost to set up the Dangote Refinery. “This allegation is an attempt to mislead Nigerians,” a source within the national oil company NNPC told THISDAY.

“NNPC Limited wishes to state that the figures stated by the governor were wrong, as the company, which represents the federal government in its efforts to rehabilitate the refineries through an Engineering Procurement and Construction (EPC) contract with its partners, has spent only its approved counterpart funding which was clearly stated during the Memorandum of Understanding (MoU) signing for the respective refineries.

“For the records, the cost approved by the federal government for the rehabilitation of the nation’s three refineries are $1.5 billion; $740 million and $548 million for Port Harcourt, Kaduna & Warri refineries, respectively.

“The two EPC contractors are Tecnimont (France), which handles the Port Harcourt Refinery rehabilitation and Daewoo (South Korea) which oversees the quick fix projects at both Kaduna and Warri refineries.

“Under GEJ, no money was borrowed for Turn-Around Maintenance (TAM). Under Buhari, only $1 billion was borrowed. Rehabilitation is still ongoing,” it stated.

The Statista data said that even though the country has been refining very little quantity, the number of throughput has been fluctuating for years and actually hit zero at some point.

 “As of 2022, the oil refinery throughput in Nigeria was equal to 6,000 barrels per calendar day. In the previous year, 3,000 barrels per calendar day of oil were handled by the country’s refineries, which means that the production had been doubled. “Generally, oil refinery operations carried out in Nigeria has been fluctuating since 2010. A peak of 108, 000 barrels per day was registered in 2011, considering the period reviewed,” it stated.