The Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, has noted that the national oil firm has a framework for supporting those interested in investing in modular refineries in Nigeria.
Modular refineries are less capital intensive crude oil processing facilities with capacities of up to 30,000 barrels per day.
There have been debates by stakeholders on whether illegal refineries, operated by oil thieves in the Niger, should be legalize or not.
Speaking during an interview aired on Nigerian Television Authority (NTA) recently, Kyari said that there was no way such refineries can be legalized, adding that they are not refineries but “cooking pots.”
He informed that the country’s current daily production averages 1.4 bpd, while technically losing 700,000 bpd to crude oil theft and production shut-ins.
“That’s why there are licences given out for modular refineries, and they can produce up to 1,000 barrels to 20,000 barrels per day (bpd). Refining is a science of its own. The cooking pots you are seeing are not refineries in any sense.
“There’s simply no way you can convert these cooking pots to legal refineries. It’s not possible. But modular refineries can be constructed and the NNPCL has a framework for supporting those who want to do modular refineries.
“It works two ways — one is the direct stealing of the oil and then being processed at the illegal refineries and also taken out from the pipelines.
“What happens is that whenever you have such massive infractions, we shut down our facilities, and therefore, this is opportunity loss.
“The production that could have come on the table and that is why we are currently on the average of 1.4 million barrels of oil.
“We had the capacity to do 2.1 million. You can technically say that you have lost about 700,000 barrels of oil per day of production. But it doesn’t mean 700,000 bpd are stolen.
“What in reality happens is that when those stealing take place, we probably lose up to 200,000 bpd of direct losses to thieves.
“And beyond this, once you have this infraction getting to a level we cannot manage, in some instances, some of the pipeline losses get up to 80 percent to 90 percent loss at one point,” he said.