Edo refinery faces shutdown over crude oil shortage

AIPCC Energy Limited, the operator of Edo Refinery and Petrochemicals Company Limited (ERPCL), is grappling with severe challenges due to a lack of crude oil supply, despite being a fully operational 1,000 barrels per day refinery.

The company’s management expressed frustration over the failure to secure the necessary crude from relevant authorities, even after President Bola Tinubu’s directive to prioritize crude oil supply to local refineries.

In a statement on Sunday, Segun Okeni, a representative of ERPCL, highlighted the refinery’s struggle to operate at full capacity.

Despite having crude oil supply agreements with Seplat Energy and ND Western since 2022, the refinery has been hindered by bureaucratic obstacles preventing access to the required feedstock.

Okeni detailed the refinery’s extensive efforts to secure crude oil, including meetings with the Nigerian National Petroleum Company Limited (NNPCL) and correspondence with the Ministry of Petroleum Resources.

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“On 18th August 2021, our team led by our chairman, met with the NNPCL CEO and its top management team to discuss our intention to buy crude oil from NNPCL and we immediately wrote seeking crude supply, the letter was dated 22 July 2022,” he said.

“In July 2022, the representatives of NNPC (from HQ Abuja and NPDC Benin) visited our facility for site inspection and to confirm the mechanical completion of the Edo refinery.

“In September 2022, we were invited for a commercial negotiation meeting with the NNPC Head of terms, after which we sent a follow-up letter identifying the oil fields from which we can offtake crude oil.

“In March 2022, we also wrote to the Ministry of Petroleum Resources, informing it of our refinery status, future projects and our challenges of lack of crude oil supply to our refinery.

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“We had also written and had a meeting with the NNPC Exploration and Production Limited (NEPL) between November 2022 and March 2023, indicating our severe need for crude oil supply from oil fields where NEPL has equity stakes.”

Despite these efforts, no progress has been made, leaving the refinery unable to operate efficiently.

ERPCL has urged the NNPCL and other crude oil suppliers to implement the necessary infrastructure for truck loading to facilitate the supply of crude oil.

This issue mirrors the challenges faced by the Dangote Petroleum Refinery, which also reported not receiving its allocated 29 million barrels of crude from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on August 9.

On August 9, the Dangote Petroleum Refinery said it had not received the 29 million barrels of crude allocated to it by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).