Bayo Ojulari, the group chief executive officer (CEO) of the Nigerian National Petroleum Company (NNPC) Limited, claims that modernizing state-owned refineries is getting “a bit more” difficult.
Although the refinery closed in May for maintenance, the NNPC announced on November 26 that the Port Harcourt refinery has formally started processing crude oil.
However, work on the Warri and Kaduna refineries is still ongoing.
Ojulari stated in a Thursday interview with Bloomberg that the NNPC is presently reviewing its refineries plans and hopes to complete the evaluation by the end of the year.
While in Vienna, Austria, for the 9th OPEC international seminar, the head of NNPC spoke to Bloomberg.
As a result, we have invested heavily in refineries and introduced numerous technologies during the past few years. “We’ve faced challenges,” he stated.
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Several of those technologies haven’t performed as anticipated thus far. However, as you are aware, we are discovering that the process of refining an extremely ancient refinery that has been abandoned for a while is getting a little more problematic.
Now, we’re going over all of our refining tactics. Before the year ends, we aim to have that review completed. After that review, we might do things a little differently.
According to Ojulari, NNPC is still unsure if the review will lead to the refineries being sold.
We are stating, however, that a sale is not impossible. To be honest, all the possibilities are on the table, but the outcome of the reviews we’re currently conducting will determine that choice,” he stated.
“Production costs in the UPSTREAM sector are approximately $20 per barrel.”
According to Ojulari, the cost of producing oil in Nigeria is between $20 and $30 a barrel.
“There are two types of costs associated with crude production: capital costs and operating costs,” he stated.
Nigeria now has operating costs that are relatively high, averaging over $20 per barrel.
A portion of that can be attributed to the investment we’ve had to make in pipeline security; as you are aware, our pipelines are now completely operational. That was the result of a large investment.
That cost is currently between $25 and $30 a barrel, but we think it will start to decline with time and stability.
By the end of the year, the nation intends to boost oil production to 1.9 million barrels per day (bpd), Ojulari continued.
