Nigeria Loses $1,000 per Barrel of Exported Crude Oil — Expert

Nigeria is losing $1,000 on every barrel of crude oil it exports due to a lack of the added value from refining, according to the Institute for Energy and Extractive Industry Law.

Speaking recently at a one-day roundtable on The Midstream and Downstream Petroleum Industry in Nigeria: The Role of NMDPRA in ensuring Energy Security, in Lagos, an energy policy expert, Mr Henry Adigun, said the $1,000 per barrel loss was no longer sustainable.

Mr Adigun said the failure of the country to reap from the gains of its crude oil through value addition which included local refining was responsible for the $1,000 per barrel loss.

According to the energy expert, the Nigerian government is supporting local refineries, but the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is not empowered in its statutes to support a monopoly of fuel supply and distribution.

He argued the Petroleum Industry Act (PIA) dictated that no single person or institution must own and control more than 40 per cent of the fuel supply and distribution stake in Nigeria.

Nigeria is looking to boost both crude oil production and domestic refining.

Africa’s largest refinery, the new Dangote facility in Nigeria, has recently started up production. With a capacity of 650,000 barrels per day, the refinery is expected to meet 100 per cent of Nigeria’s demand for all refined petroleum products and have a surplus of each of the products for export.

However, recent controversy has highlighted challenges with this development.

Recently, the Nigerian National Petroleum Company (NNPC) Limited has declared a state of emergency on production in Nigeria’s oil and gas industry as Africa’s largest oil producer struggles to boost output.

NNPC notes that Nigeria needs to take urgent action to address the challenges that have plagued the oil and gas industry for years.

Oil remains the major source of Nigeria’s foreign earnings accounting for 60 per cent. However, challenges such as oil theft and underinvestment make it difficult to attain a target of 2 million barrels per day.

SOURCE: businesspost.ng