Local refining faces risk as crude scarcity threatens investments

Operators in Nigeria’s oil and gas sector are sounding alarms over the impact of inadequate crude oil supply to local refineries, identifying it as a major deterrent to attracting Foreign Direct Investments.
Nigeria’s oil and gas sector is facing challenges due to an inadequate supply of crude oil to local refineries, which has stifled foreign direct investments. Most major investments in the sector in the last eight years have been made by indigenous private investors, with five functional refineries currently developed by local players. Operators argue that an improvement in crude supply would boost the production of refined products in-country and pave the way for more foreign direct investment (FDIFDI) into the sector.
CORAN, a registered association of modular and conventional refinery companies in Nigeria, has urged the government to treat indigenous refiners right and create an enabling environment for investments. Aliko Dangote, Chairman of the Dangote Group, stated that Africa is not growing as it should due to factors such as the sale of raw materials to the Western world and buying the same as finished goods.
According to them, most major investments in the oil sector in the last eight years were done by indigenous private investors, stressing that, for instance, the five functional refineries in Nigeria currently were developed by local players.
The Crude Oil Refinery Owners Association of Nigeria, Petroleum Products Retail Outlets Owners Association of Nigeria, and Independent Petroleum Marketers Association of Nigeria, among others, pointed out that investors were watching developments in Nigeria’s oil sector concerning crude supply.
The Federal Government, through its oil sector upstream regulator, has continued to assure operators of its efforts to meet their crude oil demands.
The spokesperson of the NUPRC, Olaide Shonola, repeatedly stated that the matter was being tackled by the commission. The commission also recently promised to ensure that crude oil was supplied to domestic refiners.
It stated that in compliance with the provisions of Section 109(2) of the Petroleum Industry Act 2021, the NUPRC, in a landmark move, had developed a template guiding the activities for Domestic Crude Oil Supply Obligation.
“The commission, in conjunction with relevant stakeholders from the NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery, came up with the template for the buy-in of all.

Source: newsnow.com

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