Nigeria Issues Refining Licenses for Three New Refineries in Abia, Delta, and Edo

The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted licenses to three companies to establish new refineries in Abia, Delta, and Edo States. The announcement was made through an official post on X by the NMDPRA.

The licenses were issued for a 100,000 barrels per day (bpd) refinery to Eghudu Refinery Ltd in Edo State, a 30,000 bpd refinery to MB Refinery and Petrochemicals Company Ltd in Delta State, and a 10,000 bpd refinery to HIS Refining and Petrochemical Company Ltd in Abia State.

The new refineries, once completed, will contribute a total refining capacity of 140,000 barrels per day to Nigeria’s domestic refining sector. The Authority Chief Executive, Engr. Farouk Ahmed, formally presented the licenses to the managing directors of the respective companies. According to the NMDPRA, these approvals align with Nigeria’s efforts to increase local refining capacity and reduce dependence on imported petroleum products.

Nigeria has long struggled with inadequate refining capacity, leading to a heavy reliance on fuel imports despite being one of Africa’s largest oil producers. The country has several refineries, but many of them have faced operational challenges over the years. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicates that Nigeria has nine operational refineries, including the Dangote Petroleum Refinery and Petrochemicals FZE, the Warri Refinery and Petrochemical Company, the Kaduna Refinery and Petrochemical Company, and the Port Harcourt Refinery Company Limited.

Other operational refineries include Aradel Refinery, OPAC Refineries, Waltersmith Refinery and Petrochemical Company, Duport Midstream Company Limited, and the Edo Refinery and Petrochemical Company. These refineries collectively have a refining capacity of 974,500 barrels per day. However, many of them are not operating at full capacity due to maintenance issues, operational inefficiencies, and funding constraints. The Dangote Refinery, which has the largest individual refining capacity at 650,000 bpd, is expected to play a major role in reducing Nigeria’s dependence on fuel imports.

The issuance of new refining licenses is part of Nigeria’s broader strategy to boost local refining and address the persistent fuel supply challenges in the country. The government has been working to attract private investment into the refining sector, encouraging companies to build new refineries or rehabilitate existing ones. The three newly licensed refineries are expected to contribute to this goal by adding significant capacity once they become operational.

Industry experts have pointed out that increasing local refining capacity will help Nigeria save foreign exchange spent on importing refined petroleum products. It could also lead to more stable fuel prices and create job opportunities in the downstream sector. However, challenges such as securing adequate funding, ensuring regulatory compliance, and maintaining infrastructure will be key factors in determining the success of these projects.

The Nigerian government has reiterated its commitment to supporting refinery development through policy reforms and incentives. The NMDPRA, along with other regulatory bodies, is expected to oversee the implementation of these projects to ensure they align with national energy goals. The approval of these refining licenses marks another step in Nigeria’s push for self-sufficiency in petroleum refining, but the effectiveness of these projects will depend on timely execution and operational efficiency.