The management of AIPCC Energy Limited, which oversees the operations of the Edo Refinery and Petrochemicals Company Limited (ERPCL), has expressed serious concerns regarding the ongoing shortage of crude oil, despite the refinery's capability to process 1,000 barrels per day.

The refinery highlighted that, notwithstanding the announcement from Dangote Refinery regarding the Nigerian National Petroleum Company Limited's (NNPCL) refusal to supply crude oil, as well as President Bola Tinubu's directive for the provision of crude oil to Dangote Refinery and other Modular Refineries in the country in Naira, the Edo Refinery has yet to receive any crude oil from the appropriate authorities.

During a press conference in Benin-City over the weekend, refinery management indicated that the company is encountering substantial difficulties due to the continuous lack of crude oil supply.

Segun Okeni, a representative of the company, informed journalists that the refinery, which requires a steady supply of 1,000 barrels per day, is struggling to operate at its full capacity.

Okeni further noted that although the company has had crude oil supply agreements with Seplat and ND Western since 2022, bureaucratic obstacles have hindered the refinery's access to this essential resource.

He also claimed that a letter sent in 2021 to the Group Chief Executive Officer of NNPCL, Mele Kyari, following numerous meetings and ongoing communication, was disregarded.

He stated, "On August 18, 2021, our team, under the leadership of our chairman, convened with the CEO of NNPCL and its senior management to express our interest in purchasing crude oil from NNPCL, and we promptly submitted a request for crude supply," with the letter being dated July 22, 2022.

He further remarked, "In July 2022, representatives from NNPC, including personnel from the headquarters in Abuja and NPDC Benin, visited our facility for a site inspection to verify the mechanical completion of the Edo refinery.

Subsequently, in September 2022, we were invited to a commercial negotiation meeting with the NNPCL Head of Terms, after which we dispatched a follow-up letter detailing the oil fields from which we could procure crude oil.

In March 2022, we also communicated with the Ministry of Petroleum Resources, updating them on our refinery's status, future projects, and the challenges we faced due to the lack of crude oil supply.

Additionally, we engaged in discussions with NNPC Exploration and Production Limited (NEPL) between November 2022 and March 2023, emphasizing our urgent need for crude oil from fields in which NEPL holds equity stakes."

However, the ERPCL representative pointed out that despite these numerous meetings, correspondences, and communications with NNPCL over the past three years regarding crude oil supply, no action has been taken.

Furthermore, he highlighted other significant challenges faced by the refinery, particularly the inability of NNPCL to allocate any of the preferred fields for crude supply since the initial engagement on August 18, 2021, noting that despite the options provided for crude allocation from ND Western, First Hydrocarbon, and Seplat, no progress has been made to date.

ERPCL has entered into a Crude Oil Supply Agreement with ND Western to facilitate the lifting of crude oil from the Ughelli Pumping Station (UPS), which is owned by NEPL and operated by Shoreline.

The company stated, "We have conducted multiple meetings with Shoreline and Heritage Oil, expressing our willingness to implement necessary modifications for the offtake of crude oil from the UPS; however, no advancements have been achieved thus far." Looking ahead, ERPCL emphasized the necessity for NNPCL and other producers to establish loading infrastructure to enable truck loading.

They criticized the situation where Dangote is receiving 30,000 barrels per day due to its public engagement, while smaller refineries remain underserved.

This disparity was described as a lack of regard for smaller enterprises that have the potential to contribute to economic growth alongside larger corporations.

Consequently, the ERPCL representative has requested the intervention of Kyari, the group CEO of NNPCL, to ensure that NUIMS honors the Seplat-ERPCL agreement, allowing the Edo refinery to commence crude oil lifting from the Oil Mining License.

Reflecting on the past two years, he expressed frustration, stating, "If local investors are unable to secure crude oil, even in modest quantities, how can we expect to attract foreign investment in the country? The total daily demand from all modular refineries is less than two percent of the daily crude oil production. Our lifting from the pumping station would also mitigate pipeline losses."

Okeni pointed out that the benefit of loading from the NNPCL pumping station to the export terminal lies in reduced costs, as expenses related to pipeline export terminal charges and losses would be eliminated, thereby enhancing the competitiveness of modular refineries compared to offshore refineries that rely on the export terminal for crude.

He cautioned that if the smallest refineries are unable to access crude oil, it would deter investment in that sector, noting that OPAC Refinery operates at less than 3% of its installed capacity, while Edo Refinery operates at less than 10% of its installed capacity.

He noted that Nigeria loses millions of dollars following the inability of NNPCL to supply modular refineries over the past three years whose total installed capacity is less than 30,000bpd.