NNPC sustains over 65,000bpd supply to country’s refinery but can’t fix its own
Cote d’Ivoire is West Africa’s regional refining hub thanks to crude oil imports from Nigeria which helped the country reach a 30-year high of 3.4 million metric tons of refined products last year.
Recall that human rights lawyer, Femi Falana had written a Freedom of Information request to NNPC for disclosure of the quantity of crude oil sold to Cote d’Ivoire among other requests which the national oil company rejected claiming the FOI Act does not apply to it.
However, an economic outlook report prepared for investors by EcoBank Cote d’Ivoire, seen by BusinessDay indicated that “crude oil was the single largest import, worth US$840mn in 2016, most of which came from Nigeria for refining in Abidjan; a large proportion of this output is re-exported back to Nigeria with the balance consumed domestically.”
In the same year, Côte d’Ivoire exported petroleum products worth US$652mn to Nigeria, reflecting the country’s role as a regional refining hub.
However, NNPC does not disclose this detail in its financial and operations report which it touts as evidence of its transparency. In its November report the corporation said: “In October 2017, NNPC lifted 9,002,509 barrels of Crude Oil for domestic utilization translating to an average volume of 290,403.52 barrels of oil per day in terms of performance.
“In order to meet domestic product supply requirement for the month of October 2017 about 5,693,877 barrels was processed under the Direct-Sales-Direct Purchase (DSDP) scheme and the balance of 2,359,704.00 barrels was delivered to the domestic refineries for processing.”
The report then presents a table indicating these headings thus presenting information that is detailed in its opacity. The Corporation will not disclose participants of its DSDP programme, the volume of crude they are allocated individually, where they are refined and what happens to the other derivatives besides diesel, kerosene, aviation fuel and petrol.
“It is also worthy to note that the NNPC does not subject its budgets to the National Assembly for appropriation as stipulated by the Constitution and the Fiscal Responsibility Act,” Femi Falana said last year.
In 2011, Austen Oniwon, then group managing director, NNPC, told a public hearing organised by the Senate Joint Committee on the Fuel Subsidy Scheme that 65,000 barrels of the daily crude allocation was being refined in Cote d’Ivoire. It is plausible that the volumes have increased, because NNPC refined about 170,000 barrels per day at the time but today it does less than 10 percent of that volume.
Meanwhile, the Ivoirian Refining Company (Société Ivoirian de Raffinage–SIR) completed in 1965, the same year as the old refinery Port Harcourt Refinery with a name plate capacity of 60,000 barrels per day (then) was commissioned. There are four state-owned refineries in rickety condition as maintenance fund have been stolen by successive managers of NNPC. Probes by lawmakers haven’t yielded change as they too are perceived as morally bankrupt.
Côte d’Ivoire completed construction of its SIR refinery at Vridi with a capacity of 700,000 tons per year. Cote d’Ivoire owns: 47.28 shares, Total: 20.35%, Sonangol: 20%, Elf Aquitaine: 5%, Burkina Faso: 5.39% and Sahara Refining LTD: 1.98. When petroleum prices surged in 1979, demand dropped significantly, and output fell to only 50 percent of capacity.
It entered into contract with Chevron Oil of the United States to process crude oil from other African countries (primarily Nigeria) helping to raise output to near capacity and, along with a financial recovery plan, led to a net improvement in the profitability of SIR.
In 1986 capacity was increased to 3.2 million tons, by the year 2010, capacity has reached 3.8 million tons equivalent to about 70,000 barrels per day refining capacity.
International Oil Companies have shunned oil refining and downstream business in Nigeria because it is not profitable. Nigeria subsidises over 50million litres of petrol currently imported into the country daily out of which 20 million litres are smuggled out daily through porous borders.
Nigeria’s refining sector fell by -46.24% in the fourth quarter of 2017, from -45.4% in third quarter, 2017 and -0.97% in the fourth quarter of 2016 beating every other sector to achieve notoriety as the worst performing sector of the economy last year according to data from the Nigerian Bureau of Statistics (NBS).
Current plans by the NNPC to ramp up refining capacity to over 445,000 barrels per day (bpd) to 662,000 bpd, through various arrangements with investors, analysts say amounts to a lot of hot air as previous schemes have yielded.
ISAAC ANYAOGU