From Adewale Sanyaolu, Houston Texas
The Petroleum Technology Association of Nigeria (PETAN) has lamented the country’s dwindling crude oil output, describing it as a major obstacle to unlocking Nigeria’s full refining capacity and achieving energy self-sufficiency.
Chairman of PETAN, Mr. Wole Ogunsanya, stated this during an interview session with journalists on the sidelines of the Offshore Technology Conference (OTC), which ended at the weekend in Houston, Texas.
Ogunsanya noted that while Nigeria needs approximately 900,000 barrels of crude oil daily to satisfy its domestic refining needs, the country currently produces around 1.8 million barrels per day, an output that must be shared between local consumption and export obligations.
According to him, out of the 1.8m bpd oil production, the Organisation of Petroleum Exporting Countries’ (OPEC) quota for Nigeria is 1.5 million bpd.
Providing a clearer picture of Nigeria’s crude oil demand for domestic refining, the PETAN Chairman noted that the Dangote Refinery accounts for the largest share with a daily requirement of about 650,000 barrels. He added that although NNPC’s refineries were originally designed for a combined capacity of 450,000 barrels per day, operational constraints have trimmed their immediate requirement to roughly 200,000 barrels. Modular refineries contribute an additional demand of 50,000 barrels per day, bringing the total national refining requirement to around 900,000 barrels daily.
‘‘By the time the BUA refinery 350,000 bpd comes on stream by next year, the crude oil refinery demand for domestic refineries will shoot up. So, for now, the country must begin plans to grow its oil production numbers to meet both local and export demand,’’ he added.
Ogunsanya emphasized that for Nigeria to achieve a balanced and sustainable oil economy, daily crude production must increase to between 2.5 million and 3 million barrels. This, he explained, would ensure the country can meet its domestic refining needs while still maintaining a healthy volume for export to generate vital revenue.
However, he further identified another challenge in the country’s quest to attain 2.5 million bpd oil production.
“At the moment, we don’t have the infrastructure and equipment required to meet a daily oil production of 2.5 million bpd. The oil rigs well services equipment and pipeline are not available to support the level of this oil production. And these are all the things that PETAN is doing to build capacity by ensuring that the capacity is there for the industry to tap into.”
He added that the recently sanctioned three Final Investment Decisions (FIDs); for the oil and gas industry in the last one year signals great opportunities for PETAN members because it would be a further avenue to build capacity and keep members busy.
The PETAN Chairman argued that idle equipment due to lack of jobs to execute is a major disincentive to the industry, saying the turnaround time for that equipment will now be higher because the same equipment can now do three to four jobs in a month instead of just one or idling away.
Besides, he explained that beyond building capacity, those projects are a means of job creation for the industry.
He argued that those projects present the opportunity for all other companies who are not even PETAN members to prove their capacity that they too can do it.
“At PETAN, we don’t just want jobs to be given to us on a platter of gold, we want to be fair to other companies. We want to compete and show our competence. Those are the kind of opportunities that projects that will come under the recently sanctioned FIDs will present.”
On the assessment of 2025 OTC, he said significant progress has been made this year compared to what obtained last year when some booths were not under the Nigerian pavilion.
He said last year, the Minister of Petroleum Resources (Oil), gave the association a marching order that all Nigerian companies exhibiting at the OTC must be under one roof (the Nigerian pavilion) and that was achieved this year.