*As 40 Oil Firms Hold Dormant Refinery Licenses
The Department of Petroleum Resources, DPR, has revealed that 40 oil firms granted licence to operate refineries still remain dormant. The resulting dormancy, the agency disclosed, has put a hold on federal government’s hope of increasing the country’s refining capacity by 1,862 200 million barrel per day, mbpd. The information is as contained in DPR’s data for the month of May, 2021.
The 40 refineries with not active refineries licenses/approval include Platinum Hydrocarbon Resources Mondonat Nigeria Limited, Southfield Petrochemical and Refinery Limited, Don Mac Limited, Shepha Petroleum and Petrochemicals Company Limited, Energia Limited, Associated Worldwide Company Limited, All Grace Energy Limited, Kainji Resources Limited, Aiteo Energy Resources Limited.
Others are American Exploration Company Nigeria Limited, Epic Refinery and Petrochemical Industries Limited, Masters Energy Oil and Gas Limited, Grifon Energy Limited, Sifax Oil and Gas Company Limited, Capital Oil and Gas Industries Limited, Green Energy International Limited, Fresh Energy Limited, Chyzob Oil and Gas Limited, Ibafon Oil and Gas FZE Refinery Limited, Owena Oil and Gas Limited, Tonwei Refinery, NSP Refineries and Oil Services, Rehoboth Natural Resources Dev. Limited, Gbaramatu Oil and Gas Producing Trust Fund, NME Consolidated Limited.
Niger Delta Petroleum Resources and Petrochemical Limited, RG Shinjin Petrochemicals Limited, Jil-Amber Consortium PHRC, Dee Jones, Hi-Rev Oil Limited, Starex Petroleum Refinery Limited, Eko Petrochem & Refining Company Limited, Petrolex Oil & Gas Limited, Ikwe-Onna Refinery Limited, Clean Waters Refinery, Southwest Refineries and Petrochemicals Company Limited, Obat Refinery Limited and Antonio Oil Company Limited complete the list.
Further analysis from Nigerian National Petroleum Corporation, NNPC, monthly reports shows that none of the affected refineries refined crude oil from July 2019 to January 2021 just as both the Warri and Kaduna refineries, with a combined operating capacity put at 445,000 barrels per day, have operated far below their installed capacity. The development resulted in the revenue loss incurred by the federal government within 19 months of not processing any barrel put at N177.21bn
While the Kaduna Refining and Petrochemical Company Limited processed crude in just one month June 2019, Port Harcourt Refining Company Limited did for two months, February and March. Only the Warri Refining and Petrochemical Company Limited processed crude for four months, running between January, February, March and May. The result is that the country had to continue relying mainly on imported refined petroleum products. However, between July 2019 and January 2021, the Kaduna Refinery incurred an operating deficit of N64.84bn.
Meanwhile, Minister of State for Petroleum, Timiprey silver, disclosed that the federal government’s subsidy regime is to blame for part of the reasons the refineries stopped functioning at full capacity. The minister made the disclosure while briefing newsmen on why the federal government is weighing its options over the issue.
“Part of the reasons the refineries were not working is subsidy because a refinery that is producing something at a certain cost and selling at a loss cannot sustain itself. “If you are producing something and they are selling at a certain subsidised price, it cannot work. That is why you see that the sector is not growing at all,” he noted.