A Review of the Nigerian Energy Industry

No Turn-Around-Maintenance of refineries in 42 years – NNPC

*NNPC refinery, Port Harcourt

Ike Amos

05 January 2019, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation, NNPC, Monday, stated that combined, the country’s refineries have not undergone Turn Around Maintenance, TAM, for an aggregate of 42-years.

In a statement in Abuja Group Managing Director of the NNPC, Mr. Maikanti Baru, however, noted that despite the challenge, major rehabilitation works were carried out in all the three refineries.

Baru, in a message to staff of the NNPC, noted that the Warri Refinery and Petrochemical Company, WRPC, had its Distribution Control System (DCS) successfully upgraded; Port Harcourt Refining Company (PHRC) had major interventions in Fluid Catalytic Cracking Unit, (FCCU) and Power Plant Unit (PPU) fixed, while Kaduna Refinery and Petrochemical Company (KRPC) was undergoing major repairs of its FCCU, Catalytic Reforming Unit (CRU) and Crude Distillation Unit 2 (CDU2).

He noted that efforts were afoot to get the original builders of the refineries to carry out TAM on them after securing favourable private funding for the exercise.

In addition, Baru noted that in the downstream sector, even though 2018 was riddled with some supply shortages, he was delighted that the corporation rose to the occasion with the support of President Muhammadu Buhari and the resilience and hard work of NNPC staff, saying as, at today, there is fuel availability in the nook and cranny of the country.

He disclosed that the NNPC imported a total of 15.874, million metric tonnes of Premium Motor Spirit, PMS, otherwise called petrol through the DSDP and the NFSF arrangement in 2018, representing 62 percent increase over the 2017 supplies of 9.807 metric tonnes, saying that as at today, the NNPC had 2.98 billion litres, equivalent to over 59 days sufficiency at 50 million litres daily evacuation rate.

He said the Corporation’s depots had been resuscitated and put to use through decanting of over 140 million litres of PMS nationwide, explaining that systems 2B and 2E pipelines supplying petroleum products to South West, South-South and South East Regions have been resuscitated.

Of the Industry milestones in the outgone year, Baru disclosed that the Egina project had achieved First Oil at 11.20pm on 29th December 2018, while he noted that the Egina Floating Production Storage and Offloading, FPSO, vessels are currently adding 200,000 barrels of oil per day to the country’s crude oil output.

He further stated that Nigeria’s crude oil daily production recorded an upward swing of about 2.09 million barrels in outgone 2018, translating to a nine percent increment, compared with the 2017 average daily production of 1.86 million barrels.

Pitched against the low-level daily crude oil production in 2016 and what obtains now, Baru, said the nation had maintained a line of consistent year-on-year improvement.

Baru explained that the average production from NPDC’s operated assets alone grew from an average of 108,000 of oil per day (bod) in 2017 to 165,000bod in 2018, describing the feat as the strongest production growth within the oil Industry in recent times, even as he added that it was worth being celebrated.

The NNPC boss said NPDC’s equity production share which stands at 172,000bod, representing about eight per cent of national daily production, was no less impressive, saying the desired results are outcomes of initiatives his Management team emplaced, among which, he noted, are the Asset Management Tea (AMT) structure, Strategic Financing, Units Autonomy, and security architecture framework.

Baru promised that NNPC would stick to the Repayment Agreement with the JV Partners while transiting to self-funding IJV modes with the Corporation’s partners, saying that tiding up the Cash Call issues have led to increased commitment and enthusiasm to invest in Nigerian Oil and Gas Industry even as it has also boosted NNPC’s credit profile internationally.

Baru concluded the achievements of NNPC in the Upstream sector by listing other milestones achieved by his team to include: reduction in contracting cycle for Upstream Operations to nine months from an average of 24, even as the corporation targets a six months cycle; lowering of production cost from $27/barrel to $22/barrel; and improving on the security situation in the Niger Delta through constructive engagement and dialogue with relevant stakeholders.

Baru revealed that in the frontier basins, NNPC has intensified explorations activities in the Benue Trough, with the expected spudding of Kolmani River Well 2 on 19th January 2019.

He explained that activities would resume in the Chad Basin as soon as there is a green light on the security situation in the enclave.

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