Dangote, CORAN, IPPG warn Nigeria must raise exploration, production to sustain refining boom

Oil refiners have demanded an end to petroleum-product imports and guaranteed access to local crude, warning that continued fuel imports, alongside under-utilised domestic refining capacity, undermine Nigeria’s efforts to retain more value from its black gold.

They warned that the decades-long era of exporting crude oil while importing refined petroleum products is ending, but the emerging domestic refining boom could only be sustained if the country urgently expands crude oil exploration and production and ensures reliable access to feedstock.

Giving the warning at the third Nigeria Oil Refining Summit (NORS) in Lagos, yesterday, Crude Oil Refinery Owners Association of Nigeria (CORAN), Independent Petroleum Producers Group (IPPG) and Dangote Refinery stressed that the next phase of the petroleum-sector transformation must be driven by stronger upstream production to support the expanding domestic refining capacity.

The development came as crude receipts by domestic refineries rose to about 683,000 barrels per day in August 2026, indicating the increasing role of local refineries in meeting the country’s petroleum-product requirements.

However, CORAN said the progress was being undermined by continued product imports and difficulties faced by some domestic refineries in securing crude on commercially viable terms.

The Chairman of CORAN, Momoh Oyarekhua, said Nigeria had moved from discussions about becoming a net exporter of petroleum products to a stage where domestic refining was increasingly transforming the country’s fuel supply landscape.

He said the next objective should be to ensure that the benefits of refining were retained within the economy through jobs, foreign exchange savings, industrial growth and greater energy security.

“Despite our abundant crude resources, some domestic refineries continue to face difficulties accessing crude oil on commercially viable terms.”

At the same time, fuel imports persist while local refining capacity remains under-utilised,” Oyarekhua said.

He said the country must progressively reduce petroleum-product imports, with imports increasingly restricted to objectively determined domestic supply shortfalls and strategic stock requirements.

Oyarekhua also called for the full institutionalisation of naira-for-crude, with transparent eligibility and access for qualifying domestic refineries, including modular refineries.

As the refining industry’s ambition to reduce imports brings the upstream sector into sharper focus, industry leaders insist that Nigeria must increase production rather than simply redirecting existing crude supplies.

For CORAN, the ultimate destination is a market in which domestic refining increasingly supplies local demand and imports become limited to objectively established shortages.

“Our crude must increasingly power our refineries. Our refineries must increasingly supply our market. And Nigeria must ultimately become a refining hub for Africa,” Oyarekhua said.

The refining association maintained that achieving that objective would require cooperation among producers, refiners, regulators, financiers and infrastructure operators, particularly as the industry moves towards greater domestic crude utilisation and reduced dependence on imported petroleum products.

President, Dangote Group, Aliko Dangote, who was represented by the group’s Chief Economist, Dr Hassan Mahmud, said the country’s expanding refining capacity made increased upstream exploration critical.

He said Nigerian crude and condensate production reached about 1.7 million barrels per day in June 2026, its highest in years, while crude receipts by domestic refineries rose to about 683,000bpd in August.

According to him, the recent improvement was encouraging but would need to be consolidated through sustained investment in upstream production.

“At the present production level, though the CEO of Aradel gave the numbers from NUPRC, Nigeria alone, crude supply, full complement, cannot feed Dangote Refinery alone in Africa. So, the need for expanding the exploration of the upstream side of the industry is extremely critical,” he said.

IPPG Chairman, Adegbite Falade, similarly said Nigeria’s refining ambitions could not be separated from the performance of the upstream industry.

He said the country had substantial hydrocarbon reserves, but the priority was converting those reserves into actual production and securing a refinery supply.

According to Falade, Nigeria’s crude oil and condensate reserves stood at approximately 37.01 billion barrels as of January 1, 2026, while natural gas reserves stood at about 215.19 trillion cubic feet.

“The challenge, therefore, is not whether the hydrocarbons exist underground; it is whether we can convert reserves into production, production into secure supply, and secure supply into domestic refining competitiveness,” he said.

Falade called for dedicated crude evacuation corridors, secure pipelines, adequate terminal capacity, sufficient storage, functional jetties and efficient marine logistics.