Oil & Energy

NNPC Plans 215,000 Bpd Extra Refining Capacity For Refineries

Published

7 years ago

April 29, 2019

In order to address the shortfall in the supply of petrol, the Nigerian National Petroleum Corporation (NNPC) has resolved to add 215,000 barrels per day (bpd) refining capacity to its existing nameplate of 445,000 barrels of crude oil per day in Warri, Kaduna and Port Harcourt refineries.
The Group Managing Director, NNPC, Dr. Maikanti Baru, disclosed this at the Society of Petroleum Engineers (SPE Nigeria Council) Annual Oloibiri Lecture Series and Energy Forum in Abuja, last Thursday.
The move, according to him, is through private sector driven colocation of its existing facilities in Port Harcourt Refining Company (PHRC) and Warri Refining and Petrochemicals Company (WRPC).
Baru stated that additionally, the corporation through its new initiative of establishing condensate refineries with private sector participation, is providing clusters for in- country refining capacity totalling about 250,000 barrels of crude per day, which closes the petrol supply- and demand gap, and also creates positive margins to the investors.
According to him, “the country’s petroleum product demand is expected to grow from 13.2 million metric tonnes in 20I5 to 15.1 million metric tonnes in 2020 and 17.3 million metric tonnes by 2025. While the population growth corresponding to this demand is 182 million in 2015, 207 million in 2020 and 234 million in 2025 respectively. The average population growth rate is three per cent per annum.”
The GMD revealed that Nigeria would need a refining capacity of 1.52 million barrels per day of crude oil in order to meet its petrol requirement by 2025, noting that this capacity requirement includes Dangote’s 650, 000 barrels per day refinery, which leaves a short fall of 20 million liters, that is equivalent to 427,000 barrels per day.
“In order to address this shortfall in PMS demand, NNPC is adding 215,000bpd to the existing nameplate capacity of 445,000 barrels per day.
“There is an emerging class of new producers within the oil and gas industry, who are primarily local independents with a non-diversified portfolio and lean balance sheet or required track record to raise substantial funds. They have become important because approximately 15 per cent of both crude oil and gas reserves and national production lie in their hands”, he said.
Baru observed that there is increasing global competition on Nigerian crude oil due to the rise of new production centres across the globe particularly in Africa and Argentina, adding that these portend a new dimension to the Nigerian oil and gas industry.
“Nigeria therefore, needs to unlock new barrels as quickly as possible to stay relevant in the new emerging world. Without adequate funding we cannot meet the targets”, he stated.
The NNPC boss informed that despite abundant oil and gas reserves, Nigeria experiences shortages in electric power and based on Nigeria’s energy consumption current and forecast statistics showed an increase from 6,000 megawatts in 2015 to 30,000 megawatts by 2025.
He further stated that the primary source of the current power supply is hydro and gas, saying that the future consumption, which is expected to drive growth by 2025 would need aggressive development of gas and renewables projects to meet the exponential demand.
He added, “For the upstream, we are committed to aggressive production growth and our target is to achieve a reserve level of 40 billion barrels of oil and production capacity of four million barrels of oil per day by 2025.
“They also require substantial capital for growth. The Nigerian oil and gas landscape is fast changing from lOC-dominated to a much more diversified cocktail of influences involving locals independents and national oil company (NNPC).”
Baru revealed that the corporation is spearheading the drive towards increased development of hydrocarbon reserves by ring fencing exploration budgets and increased professional focus on the Frontier Basins through activities of the Frontier Exploration Services (FES) Division.
“To ensure full energy sufficiency for Nigeria, NNPC is also focusing on developing the nation’s gas resources. The seven Critical Gas Development Projects targeted to deliver about three bscf/d of gas resources to the gas market by 2020 are at different stages of development.
“The Federal Executive Council (FEC) has approved the EPC contractor financing of the Ajaokuta-Kaduna-Kano (AKK) Pipeline.
“Discussions are being finalised on financing for the project while early works has progressed. The intention is to apply this financing model on the development of future gas pipelines such as the QIT to 0B/0B pipeline, Obigbo Umuohia Ajaokuta pipeline. The AKK pipeline is targeted for completion in 2022.
“At completion, the AKK pipeline will deliver gas to the planned Abuja, Kaduna and Kano Power Plants, which would generate a combined additional 3,600 mw to the Notional Grid amongst others.”
Baru, however, said that it is quite an exciting time ahead for the Nigeria Oil and Gas Industry, saying the industry is funding both development and infrastructure through automotive means.
He expressed NNPC’s appreciation for the cooperation of its partners, government and financiers towards moving the industry forward, stating that the corporation’s goal remains value delivery.

Oil & Energy

NERC, OYSERC Partner To Strengthen Regulation

Published

15 hours ago

February 23, 2026

The Tide

THE Nigerian Electricity Regulatory Commission (NERC) has stressed the need for strict adherence to due process in operationalizing state electricity regulatory bodies.

It, however, pledged institutional and technical support to the Oyo State Electricity Regulatory Commission (OYSERC).

The Chairman, NERC, Dr Musiliu Oseni, who made the position known while receiving the OYSERC delegation, emphasised that the establishment and take-off of state commissions must align fully with the law setting them up.

Oseni said that the NERC remains committed to partnering with State Electricity Regulatory Commissions (SERC) to guarantee their institutional stability, operational effectiveness and long-term success.

He insisted that regulatory coordination between federal and state institutions is critical in the evolving electricity market framework, noting that collaboration would help to build strong institutions capable of delivering sustainable outcomes for the sector.

Also speaking, the Acting Chairman, OYSERC and leader of the delegation, Prof. Dahud Kehinde Shangodoyin, said that the visit was aimed at formally introducing the commission’s acting leadership to the NERC and laying the groundwork for a productive working relationship.

Shangodoyin said , the acting members were appointed to provide direction and lay a solid foundation for the commission during its transitional period, pending the appointment of substantive members.

“We are here to formally introduce the acting leadership of OYSERC and to establish a working relationship with NERC as we commence our regulatory responsibilities,” he said.

He acknowledged NERC’s readiness to provide technical and regulatory support, particularly in the area of capacity development, describing the backing as essential for strengthening the commission’s operations at this formative stage.

“We appreciate NERC’s willingness to support us technically and regulatorily, especially in building our capacity during this transition,” he added.

Oil & Energy

NLC Faults FG’s 3trn Dept Payment To GenCos

Published

15 hours ago

February 23, 2026

The Tide

The Nigeria Labour Congress and the Association of Power Generation Companies have engaged in a showdown over federal government legacy debt.

NLC president Joe Ajaero has faulted the federal government’s move to give GenCos N3 trillion from the Federation account as repayment for a power sector legacy debt, which amounts to N6.5 trillion.

In a statement on Thursday, Ajaero said the Federal Government proposed the N3 trillion payment and the N6 trillion debt as a heist and grand deception to shortchange the Nigerian people.

“Nigerians cannot and should not continue to pay for darkness,” Ajaero stated.

Meanwhile, the Chief Executive Officer of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji, said Ajaero may be ignorant of the true state of things, insisting that the federal government is indebted to GenCos to the tune of N6.5 trillion.

She feared the longstanding conflict could result in the eventual collapse of the country’s power.

According to her, the federal government’s N501 billion issuance of power sector bonds is inadequate to address its accumulated debt.

Oil & Energy

PENGASSAN Rejects Presidential EO On Oil, Gas Revenue Remittance ……… Seeks PIA Review

Published

15 hours ago

February 23, 2026

The Tide

The Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Festus Osifo, has faulted the public explanation surrounding the Federal Government’s recent oil revenue Executive Order(EO).

President of the association, Festus Osifo, argued that claims about a 30 per cent deduction from petroleum sharing contract revenue are misleading.

Recall that President Bola Ahmed Tinubu, last Wednesday, February 18, signed the executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.

The order also scrapped the 30 per cent Frontier Exploration Fund under the PIA and stopped the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited.

In his reaction, Osifo, while addressing journalists, in Lagos, Thursday, said the figure being referenced does not represent gross revenue accruing to the Nigerian National Petroleum Company Limited.

He explained that revenues from production sharing contracts are subject to several deductions before arriving at what is classified as profit oil or profit gas.

Osifo also urged President Bola Tinubu to withdraw his recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.

He warned that the directive undermines the Petroleum Industry Act and could create uncertainty in the oil and gas industry, insisting that any amendment to the existing legal framework must pass through the National Assembly.

Osifo argued that an executive order cannot override a law enacted by the National Assembly, describing the move as setting a troubling precedent.

“Yes, that is what should be done from the beginning. You can review the laws of a land. There is no law that is perfect,” he said.

He added that the President should constitute a team to review the PIA, identify its strengths and weaknesses, and forward proposed amendments to lawmakers.

“When you get revenue from PSC, you have to make some deductibles. You deduct royalties. You deduct tax. You also deduct the cost of cost recovery. Once you have done that, you will now have what we call profit oil or profit gas. Then that is where you now deduct the 30 per cent,” he stated..

According to him, when the deductions are properly accounted for, the 30 per cent being referenced translates to about two per cent of total revenue from the production sharing contracts.

“In effect, that deduction is about two per cent of the revenue of the PLCs,” he added, maintaining that the explanation presented in the public domain did not accurately reflect the structure of the deductions.

Osifo warned that removing the affected portion of the revenue could have operational implications for NNPC Ltd, noting that the funds are used to meet salary obligations and other internal expenses.

“That two per cent is what NNPC uses to pay salaries and meet some of its obligations.The one you are also removing from the midstream and downstream, it is part of what they use in meeting their internal obligations. So as you are removing this, how are they going to pay salaries?” he queried.

Beyond the immediate impact on the company’s workforce, he cautioned that regulatory uncertainty could affect investor confidence in the sector.

“If the international community and investors lose confidence in Nigeria, it has a way of affecting investment. That should be the direction. You don’t put a cow before the horse,” he added.

According to him, stakeholders, including labour unions and industry operators, should be given the opportunity to make inputs at the National Assembly as part of the amendment process saying “That is how laws are refined,”