Niger Delta Exploration & Production (NDEP) Plc, produced 152.84Million litres of diesel, kerosene, high pour fuel oil and naphtha from its three -phase refinery in 2022.
Nigeria’s best ranked indigenous E&P firm doubled its output of petroleum products for the second consecutive year: 2022’s was 105% increase on 2021’s 74.53Million litres. That itself was double the output of 37Million litres in 2020.
“The refinery was the focal point for the company’s realising value in 2022”, says Gbite Falade, the company’s Chief Executive Officer.
The surge in production was extracted in a severely challenging business environment. As crude oil export dropped as a result of the outage of the Trans Niger Pipeline, NDEP proceeded to debottleneck the refinery production from upstream oil production, pumping in more crude into its 11,000Barrel Per Stream Day refinery complex. “Capacity utilisation improved to 24.0% from 13.45% in 2021; underscoring further upside potential as well as additional opportunities that exist to further optimise the refinery business”, Falade says in an update.
But there are back end stories to these figures.
One is about Naptha, a product which wasn’t sold on its own. Until 2022, it had always been spiked into the crude stream and exported. But the nine-month long outage of the TransNiger Pipeline in 2022 meant that there was no market for the Naptha as it is not in demand in Nigeria. “We had to work with regulators and standards agencies, for the licencing for storage and export of Naptha, satisfying very stringent requirements”, Falade explains.
In the event the company has one more petroleum product, outside of raw crude and gas, that is a foreign exchange income earner.
NDEP’s refining growth is set against the background of the unproven nature of the crude oil refining landscape.
Unlike upstream work, which teems with activity and skills that can be hired round the corner, the refining landscape lacks a robust technical workforce.
State owned NNPC, with combined nameplate capacity of 445000BPSD, has been the only warehouse of refining skills in the country, but it has been chronically inefficient and hasn’t produced anywhere close to 15% of its capacity in 15 years. “Local support from a technical and operational point of view is lacking”, Falade says. Which is why the company has always had to bring in Original Equipment Manufacturers (OEM) personnel to ‘put out fires’, in a manner of speaking. The company has been investing in upskilling and ensuring that OEM personnel adequately pass on the skills.
Other challenges have tested the capacity to deliver.
Falade recalls the vigorous work of lowering the pour point of the High Pour Fuel Oil, one of the refinery’s top revenue earners. “At atmospheric pressure, the product was congealing, such that offtake was complicated”, he explains. He is happy to conclude that the resolution of every one of these complications has aided the improvement of the refining ecosystem. “There’s a curve we are passing which anyone who comes after us would not need to navigate”.