By Mercy Salawu
The Crude Oil Refiner Owners Association of Nigeria (CORAN), has raised the alarm that stranded crude located in various parts of the Niger Delta was limiting its capacity.
Chairman of CORAN, Mr. Momoh Oyarekhua stated this at a panel session on the Nigeria Energy Downstream Forum at the ongoing Nigerian International Energy Summit(NIES) 2024 in Abuja, recently.
Oyarekhua said there were a lot of crude oil sites that do not have pipelines linked to them and thus makes evacuation of the oil nearly impossible.
He said access to such oil should be granted to those that need them, saying crude oil production without refining capacity is an effort in futility.
Oyarekhua,who is also the Chairman of OPAC Refinery said most companies into oil production and exploration were only interested in export because of the foreign exchange earnings but not keen about domestic refining.
The OPAC boss said it makes no sense for the country to export its crude to gain forex but later use the same forex generated to import petroleum product.
He lamented that over 40 per cent of the country’s forex goes into importation of petroleum products, a trend he said could be reversed if more modular refineries are empowered through adequate access to crude oil.
According to him, there exit enough room for investment opportunities in the refining space, saying currently, CORAN members have the capacity to refine 27,000 barrels of crude oil per day.
‘‘You cannot overemphasis the importance of refining in the energy value chain. Without refining we cannot have the downstream sector. Anywhere in the world where you extract oil, you extract it because you must refine it. If you don’t refine it, there is nothing to do with it.
“We have now come to realize that there is a very huge importance of refining. But the key question is that what have we done as a country with refining, we have almost done nothing. Will upstream and downstream exist without refining? The answer is no”.
He said that by encouraging and increasing local refining, Nigeria saves itself the embarrassing situation of chasing crude buyers around the world, and can also eliminate the importation of premium motor spirit (PMS) and other refined products thereby making it possible that the country cuts its foreign exchange exposure.
“We can save a lot of foreign exchange which will be utilized to fund other important sectors of the economy, which will mean that, as a country, we will not be heavily exposed to the international crude or currency politics.
“More investment is needed to increase our local refining capacity and the government should provide specific ‘Target Framework’ to further support and encourage local investors in this sector so as to ensure that we produce enough for our local consumption and even for export to earn more foreign currencies while creating jobs”.
The CORAN Chairman maintained that government increasing and doubling support for local refineries will further reduce the hardship faced by some of the players in the downstream sector of the oil industry whilst ensuring that Nigeria can achieve better consumer-friendly pricing for PMS and other finished products which can be produced locally.
He said’:‘As a nation, we must boost the capacity of our local refineries and scale the modular refineries to meet the challenges of the future and to also sustain the gains we have made in the oil and gas industry”.
