Can you introduce OPAC Refineries to our audience? 

OPAC Refineries is a modular refinery in Nigeria, promoted by our parent company, OMSA Integrated Services Limited, with the core mission to refine crude oil and supply clean fuels in Nigeria and Sub-Saharan Africa. We started our 10,000 bpd proof-of-concept project in 2017, with the plan to increase the plant’s capacity to 60,000 bpd within the next five years, with the intent to locate more modular refineries close to onshore marginal fields across Nigeria. Various challenges, especially the lack of crude oil supply to the refinery, have limited our expansion plans, but we see challenges as stepping stones and are continuously working on opportunities to optimize the plant’s installed capacity.    

Why is there a lack of crude oil supply?

One would have thought that a country like Nigeria which produces crude oil would be able to supply crude to our refinery, but we are still faced with the lack of supply. To mitigate this challenge, the government needs to create a solid platform for the supply of feedstock to refineries in Nigeria. As a crude-producing country, the government’s first focus should be to dedicate a particular quantity of that supply to local refineries in Nigeria. The PIA and the Regulations have captured domestic crude supply, but we have not seen these regulations being implemented. However, there are current conversations that are ongoing about implementing this law.

What opportunities do you see for Nigeria in the refining space?

Given that Nigeria is a large producer of crude, the country should be a better supporter of locally refined products, which will significantly contribute to the country’s economic growth. The government should support private entrants into the refinery sector so that the country can benefit from the value chain that exists in the refining of crude and domicile the value of refined products locally. 

In addition, there are several areas where we have trapped crude oil in Nigeria as a result of insecurity or the vandalization of pipes. As the Chairman of the Crude Oil Refinery-owners Association of Nigeria (CORAN), I have advocated that the government should support the private sector-driven installation of modular refineries in clusters where crude is trapped so that we can refine those products into the local market, rather than trying to create pipelines for those products to be exported, as the costs of installing pipelines and providing security to protect those pipelines is tremendous. We should rather channel those funds into creating local modular refineries that will also create auxiliary businesses and job opportunities around them.

What opportunities do you see in Nigeria’s gas space? 

There are opportunities in the gas space, but the business environment is not extremely encouraging. As a refiner, you are also a gas producer, as there is associated gas that comes from the refining activities. If the business environment was good, we would capture that gas and produce LPG, or any other form of gas, for local use. This opportunity is currently not viable as we are today struggling to get feedstock for our 10,000 bpd refinery, and we are not thinking of making any investments in the gas space until we stabilize and optimize our current business. Our parent company is working on a gas distribution strategy, but until our current challenges are addressed, we will not be entering the gas market. 

What is OPAC Refineries’ strategy to optimize its current 10,000 bpd plant? 

OPAC Refineries is already engaging with the government agency NUPRC, which is in charge of ensuring that the Domestic Crude Oil Supply Obligations (DCSO) framework is implemented. We have had several meetings over the past weeks, and we are optimistic that something better than what we have now will come to the table soon. 

Do you have a final message for our international audience? 

Nigeria has significant potential in the oil and gas space, and the government should call all the stakeholders together to strategize a way to promote the Nigerian oil and gas opportunities, whether downstream, midstream, or upstream.