NNPC states reasons government shuts all refineries as Nigeria discovers oil in Benue Trough

*All 4 refineries were functioning below installed capacity, says Mele Kyari, GMD of NNPC

*Oil discovery in Benue Trough would enable petroleum products to be within reach of consumers

Isola Moses | ConsumerConnect

The National National Petroleum Corporation has disclosed reasons it shut down four oil refineries in Port Harcourt, Warri and Kaduna respectively.

Malam Mele Kyari, Group Managing Director (GMD) of NNPC, who stated this on a Channels TV programme Wednesday, September 9, explained that all four refineries were functioning below capacity, and it had become necessary to stop them from operating all together.

Kyari said: “First, all the four refineries in three locations are shut down, and it was a deliberate decision for two reasons.

“One is that delivery of crude oil to these refineries is completely challenged because the pipeline network has been completely compromised by vandals and all kinds of people that will not allow us to operate these pipelines.

“That means you are not able to deliver crude oil to these refineries effectively to their maximum capacity.

According to the NNPC GMD, the second factor is “what you call rehabilitation is different from the turnaround maintenance. Turnaround is routine which every refinery does but when you talk about rehabilitation, it is that colossal loss of capacity in the refinery, and it means you haven’t done the turnaround maintenance properly.”

He further stated that “typically, every refinery is expected to operate at 90 percent of its installed capacity.

“With the best of effort, with all the turnaround maintenance that has taken place, it is impossible to run any of the refineries before the shutdown at that level.

“Our estimate was to run it at 60 per cent of capacity but if you do that, all you are doing is value destruction.

“You will take $100 crude into the refinery and bring out $70 product. It doesn’t make sense.”

Meanwhile, the NNPC has announced the discovery of vast oil find in the Benue Trough, a geological structure spanning about 1,000 kilometres North-East from the Bight of Benin to Lake Chad.

Kyari Wednesday said hopes were high that oil would be struck soon in the Chad Basin and the Anambra Platform.

He said: “As a matter of fact, we have found significant oil in the Benue trough,” Mr Kyari said of oil exploration in the north.

“There are potentials for finding oil in other basins of the country, in the Chad Basin, in the Anambra platform. And that will add to our reserves, the target of reserves would be met.”

He noted that the development would enable products to come within the easy reach of consumers.

Kyari assured that the formal announcement would be made at the right time “on the basis of the law.”

The oil find comes at a time that Nigeria is said to be exploring ways of discontinuing reliance on oil, which provides around 60% of government’s revenue and 90% of foreign exchange earnings, and diversify its revenue base.