19 April 2017, Sweetcrude, Lagos – The Nigerian National Petroleum Corporation, NNPC, says its three refineries in Warri, Kaduna and Port Harcourt have benefitted from a new refineries business model under the 12 Business Focus Areas, BUFAS, strategy introduced last year by the corporation.
According to the NNPC, the new business model has transformed the refineries from “tolling plants to merchant plants” thereby placing them on the path of profitability.
The corporation stated in a statement that as a result of the new strategy capacity utilisation of the refineries increased by about 29 percentage points in January 2017 compared with their performance in December 2016.
The NNPC’s latest Monthly Financial and Operations Report for January, indicated that capacity utilisation rose to 36.73 per cent in January, 2017, as against 7.55 percent in the previous month of December, 2016.
The Port Harcourt Refining Company, PHRC, and Warri Refining and Petrochemical Company, WRPC, posted surpluses of N5.11 and N404 million respectively.
Under the new refinery model, each refinery purchases crude oil at export parity price, processes and sells the corresponding products on its own account.
“This is different from the previous tolling plant model where the refinery does not take title to the crude, but rather charges a tolling/processing fee to the owner of the crude which was PPMC on behalf of the Corporation”, the report stated.