Nigeria to extend Oil-for-Fuel swaps for more than 2 years

Nigeria will extend its Oil-for-Fuel swap deals to not less than two years after the inability to have fully operational refineries.

Mele Kyari, Nigerian National Petroleum Corporation’s new managing director, said Nigeria will persist with an annual swap program until the refineries are fixed by 2023.

Nigeria currently has five refineries of which four plants are owned by the Nigerian Government through the NNPC, while the fifth is owned and operated by Niger Delta Petroleum Resources (NDPR). All of these are either under-performing or not operational.

The government has since promised to revamp the refineries. In March began the first phase of the rehabilitation of the refineries started with the Port Harcourt refinery.

Port Harcourt refinery complex also houses the 60,000 barrels per day old refinery that was built in 1965 and the 150,000 barrels per day new refinery, inaugurated in 1989.

Kyari said the refineries will be ready by 2023, starting with the 210,000 barrel-a-day capacity plant in Port Harcourt which is due to be completed in October.

“What we are doing is to see how can we get our refineries back on course and how do we support others to increase local refining capacity,” Kyari said.

“Ultimately, by 2023 we should be a net exporter of petroleum products, assuming we’re able to get Dangote refinery at full capacity and we’re able to fix our refineries,” he added.

The latest round of the swap program, known as Direct Sale, Direct Purchase, or DSDP, will run until September 2020 and then be extended.

“The DSDP is a child of necessity and not a permanent arrangement,” Kyari said. “So anytime we are able to meet our domestic petroleum products requirement, of course DSDP goes away.”