Edo Refinery on Brink of Shutdown, Shortage of Crude Oil Supply Threatens Operation

Management of AIPCC Energy Limited, which runs Edo Refinery and Petrochemicals Company Limited (ERPCL), said the country is running short of crude oil despite its 1,000 barrels per day capacity crude refinery operating at full capacity.
The company said Edo refinery is yet to receive supplies from the relevant authorities despite President Bola Tinubu’s directive to supply crude oil to local refineries.
Speaking to reporters in Benin City on Sunday, the refinery management said the company is facing significant challenges as the crude oil shortage continues.
Segun Okeni, a company executive, said the refinery is barely running at full capacity.
Okeni said the company has existing crude supply agreements with Seplat Energy and ND Western from 2022 onwards, but bureaucratic bottlenecks are preventing the refinery from accessing the much-needed crude feedstock.

“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.
“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.”
However, Edo refinery officials said that despite these meetings, letters, and communications with NNPC over the past three years, no action had been taken regarding the crude oil supply issue. Looking ahead, ERPCL said NNPC and other crude oil suppliers need to develop loading infrastructure to allow trucks to be loaded.
On August 9, Dangote Oil Refinery announced that it had not received the 29 million barrels of crude oil allocated to it by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).