Warri Refinery | File Image
Nigeria’s refineries face abandonment, Dangote plans crude oil production
By Ruth Johnbull
Nigeria’s four major refineries may likely be left to rot away as all enphasise are on the privately-owned Dangote Refinery commissioned by former President Muhammadu Buhari in May 2023.
This is coming on the heels of Dangote Group’s concluded plan to start production at its two Nigerian oil assets in the fourth quarter of 2024, after enduring months of crude supply woes.
It was revealed by the latest report by S&P Global Commodity Insights.
The report quoting company sources said Dangote is currently seeking a Floating Production Storage and Offloading (FPSO) vessel with a capacity of 650,000 barrels of crude.
The company holds an 85% stake in West African E&P Venture, which in turn has a 45% working interest in the two blocks, alongside the state-owned Nigerian National Petroleum Company’s 55%.
The other stakeholder in West African E&P is Nigerian upstream player, First E&P, which operates OMLs 71 and 72.
The licenses are located in the shallow water in the southeast of the troubled Niger Delta, just 22 km from the onshore Bonny terminal.
They contain the Kalaekule and Koronama oilfields.
Discoveries were first made on the blocks in 1966, and Shell began production there two decades later.
Output peaked at 21,000 b/d in 1999, before declining in 2003.
Also read: Dangote’s battle for survival in the midst of oil cabal
However, according to data from Commodity Insights, the fields still hold recoverable resources of almost 300 million barrels of oil and as much as 2.3 Tcf of natural gas.
Commodity Insights forecasts that production at the blocks could start in 2026, reaching 43,000 boe/d by 2036.
Dangote’s upstream activities are seldom discussed, but the imminent startup of production at OMLs 71 and 72 suggests the Dangote refinery could soon supplement its crude feedstock, after having faced months of crude supply issues.
The $20 billion facility came online in January, and started up its residue catalytic cracker in early September, allowing for high-volume gasoline production when the unit stabilises by as early as October, according to a company executive.
The refinery was designed to end Nigeria’s decades-long dependence on imported refined products.
To date, it has produced volumes of petrol, diesel, jet fuel and naphtha, for domestic use and export.
Former President Muhammadu Buhari Inaugurates Dangote Petroleum Refinery in Lagos on 22nd May 2023.
Nigerian government owned comatose refineries
Kaduna Refinery: The Kaduna Refining And Petrochemical Company refinery was established in 1980, costing $525 million, to provide petroleum products to Northern Nigeria, starting with a capacity of 50,000 barrels per day (bpd).
In 1983, a second 50,000 bpd crude unit was added specifically for producing lubricating oils, doubling the capacity to 100,000 bpd. By 1986, the capacity of the initial crude unit was further increased to 60,000 bpd. These expansions have raised the refinery’s current maximum capacity to 110,000 bpd.
Old Port-Harcourt refinery: The original Port Harcourt refinery was constructed and commissioned in 1965, with a refining capacity of 60,000 barrels of oil per day. At the time, Shell BP invested around £12 million in its construction. Initially, the refinery operated at over 50 percent of its designed capacity, but throughout the 1990s, its output gradually declined.
In March 2021, the federal government awarded the refinery’s repair contract to Tecnimont SPA, an Italian company that would execute the repairs in phases. In December of last year, the Minister of Petroleum Resources, Senator Keineken Lokpobiri, announced the mechanical completion and flare startup of the refinery.
New Port-Harcourt refinery: In 1985, the federal government commissioned the New Port Harcourt refinery, which was constructed at a cost of $850 million.
The facility has a refining capacity of 150,000 barrels of oil per day. With the commissioning of the New Port Harcourt refinery, the total refining capacity of the Port Harcourt plants increased to 210,000 barrels per day.
Warri Refinery and Petrochemical Company (WRPC): The refinery is located at Warri in Nigeria’s Delta State and was commissioned in 1978. Warri is a complex conversion refinery with a nameplate distillation capacity of 125,000 bpd.
The refinery complex includes a petro-chemicals plant commissioned in 1988 with production capacities of 13,000 million tons per annum (MTA) of polypropylene and 18,000 MA of carbon black. The refinery supplies markets in the south and southwest regions of Nigeria.
Waltersmith Refining and Petrochemical Company: Situated in Imo State, the Walter Smith refinery is a 5,000 barrel per day oil refinery. With intentions to increase its capacity to 50,000 bpd in the upcoming years, the refinery began operations in 2020.
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