Lokpobiri To Dangote: NNPC, IOCs Can’t Be Blamed For Crude Oil Shortage To Refineries

The federal government has explained the reason why International Oil Companies, IOCs, failed to allocate enough crude oil to Dangote Refinery and other local refineries in the country.

A large chunk of the nation’s crude has been pledge on contract, according to the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, who said it’s not the fault of IOCs that the over $20 billion Dangote Refinery has not been receiving enough crude feed stocks for production.

The minister contend that the problem of crude shortage for the local refineries will persist except the country ramps up its crude production form the current level of below two million barrels per day.

Last year, amidst the squabble between the Nigerian National Petroleum Company Ltd, NNPCL, and Dangote Refinery, the owner of the largest petro-chemical refinery in Africa, and Africa’s Richest Man, Aliko Dangote had accused the IOCs of trying to sabotage the refinery by ensuring that it doesn’t get enough crude oil for production.

In July last year, as the clash between Dangote and NNPCL got worse, President Bola Ahmed Tinubu ordered the government-owned oil firm to allocate the government 450,000 barrels of crude share to Dangote and other indigenous oil companies.

Before the President’s order, Dangote was only receiving four cargoes of crude out of the 15 cargoes it required for its production, a situation that has somehow stunted its efforts to provide energy security for the country as has been envisaged.

In spite of the president’s directive, Dangote Refinery insist that it has been forced to import crude oil from Europe and United States to balance the shortfall from NNPCL.

Reacting, at an oil and gas forum on Wednesday in Abuja, Lokpobiri said the fault is not entire that of NNPCL and IOCs, saying most of the nation’s crude had been pledged out in contracts, that cannot be reversed despite the domestic crude requirements problems facing Dangote and other local refineries.

According to Lokpobiri, “Today, we have a challenge with domestic crude oil supply obligation, which is provided for in the Petroleum Industry Act, but we cannot keep what we do not produce. But you can’t keep what you don’t produce. You can’t keep what you have already committed.

“I do know that most of you know the companies operating in Nigeria had commitments when they were raising funds for investment. But if we increase our production, we’ll be able to get more volumes, satisfy both our domestic obligation and also satisfy our external obligations.”

The magazine reported that a large part of the Nigeria’s crude oil sales had been pledge out for loan during the administration of President Mohammadu Buhari.