The Dangote refinery, along with the recently upgraded Port Harcourt and Warri refineries, as well as six additional refining facilities throughout Nigeria, is projected to utilize approximately 37 percent of the nation's anticipated crude oil output in the first half of 2025.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), a total of 123.48 million barrels will be allocated among the nine operational refineries in the country during this timeframe.
The Commission highlighted that the required volume for local refineries was provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in accordance with section 10(1)(2) of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023.
In total, Dangote is expected to receive 99.5 million barrels of the projected 123.48 million barrels of local crude production in the first half of 2025, followed by Warri with 13.57 million barrels and the new Kaduna refinery, which will consume 3.9 million barrels of the domestic crude oil supply.
Additionally, the Old Port Harcourt refinery, with a capacity of 60,000 barrels per day, will require 2.86 million barrels during the first six months of 2025, while the Aradel refinery in Rivers State will need 1.26 million barrels.
Over the past decade, Nigeria had closed its aging oil refineries but has recently started to reopen them in phases, supported by the 650,000 barrels per day Dangote refinery and various modular refineries located in southern Nigeria.
Furthermore, the OPAC refinery in Delta State will need 900,000 barrels for this period, followed by Waltersmith with 814,500 barrels, Duport Midstream with 360,000 barrels, and Edo refinery and Petrochemicals with 186,000 barrels.
According to data from the NUPRC, 56 oil companies engaged in Nigeria's upstream petroleum sector, including Shell, Seplat, and NNPC Exploration and Production Limited (NEPL), are projected to drill the largest volume of oil necessary to sustain refinery operations from January to June 2025.
In the forecast release, which was signed by NUPRC Chief Executive Gbenga Komolafe, the commission emphasized its goal of ensuring optimal capacity utilization of the country's domestic refineries during this timeframe.
Nevertheless, despite efforts to revitalize several refineries, there has been ongoing tension among refining companies, which have accused Nigeria's crude oil producers of failing to fulfill their domestic supply commitments, constituting a violation of the PIA.
“The move is pursuant to Section 109 of the Petroleum Industry Act (PIA), 2021 and it is aimed at effective capacity utilisation of the nation’s domestic refineries by ensuring a consistent supply of crude oil,” the commission stated.
According to the NUPRC, the comprehensive data offers valuable insights into projected crude oil requirements for refineries, which is critical for understanding Nigeria's energy sector outlook during the first half of 2025. Raquel
“The forecasted daily crude requirement for refineries, which is 770,500 bpd, is about 37 per cent of the forecasted first half 2025 average daily production of 2.066 million bpd,” the NUPRC pointed out.
Nevertheless, it is noteworthy that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) initiated "Project 1 Million Barrels" in October 2024, a project anticipated to significantly enhance national production levels.
“NUPRC is leveraging the capacity of upstream operators to meet the target daily production of 2.5 million barrels per day in the short term.
“This strategic initiative aligns with Nigeria’s commitment to bolstering its domestic refining capacity and ensuring the sustainability of its oil industry. The first half of 2025 is expected to witness increased synergy between local refineries and producing companies, setting the stage for a more robust and self-reliant petroleum landscape in Nigeria,” Komolafe added.
Oil prices experienced a decline of approximately 3 percent in 2024, marking a second consecutive year of falling prices. This downturn was attributed to a slowdown in post-pandemic demand recovery, challenges within China's economy, and increased crude production from the US and other non-OPEC countries, contributing to a well-supplied global market.
On the last trading day of the year, Brent crude futures rose by 65 cents, or 0.88 percent, closing at $74.64 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude increased by 73 cents, or 1.03 percent, finishing at $71.72 per barrel. According to Reuters, oil prices are expected to hover around $70 per barrel in 2025.
The Brent benchmark concluded the year approximately 3 percent lower than its final closing price of $77.04 in 2023, while WTI remained relatively unchanged compared to last year's closing figures.
In September, Brent futures dipped below $70 per barrel for the first time since December 2021. Throughout 2024, Brent generally traded below the peaks observed in previous years as the post-pandemic demand surge and the price volatility resulting from Russia's 2022 invasion of Ukraine began to diminish.
A Reuters monthly poll indicated that oil is likely to trade around $70 per barrel in 2025, driven by weak demand from China and increasing global supplies, which may counteract OPEC+-led initiatives aimed at stabilizing the market.