Nigeria aims to end the country’s so-called oil-for-fuel swaps system in the near future and rely instead on oil products from local refineries, which it hopes to have running again by 2023, the head of Nigeria’s national oil company NNPC said on Tuesday.
The oil-for-swap deals, in operation since 2016, provide virtually all Nigeria’s gasoline and some of the diesel and jet fuel. NNPC exchanges around 300,000 barrels per day of oil for the imported fuels.
While NNPC has refineries with a combined nameplate capacity of 445,000 barrels per day, decades without regular maintenance or investment leaves the oil exporting country almost wholly reliant on imports for refined products. Nigeria closed its ailing oil refineries in April until they can be fixed.
NNPC chief Mele Kyari told a virtual panel at the African Refiners & Distributors Association annual conference that while the swaps had saved the country roughly $1 billion a year, they could soon be scrapped.
“I don’t see an extension of that process in the near future as we progress and transit into more production locally,” he said.
Kyari said he expected NNPC’s refineries to be fully revamped and running again by 2023. NNPC has said it will partner with private companies to upgrade the refineries and then run them as part of a drive to process its own oil and cut reliance on imported fuels.
“Our plan is to deliver all of them by 2023,” Kyari said. He did not name any companies that have expressed interest in the upgrade and repair projects.
“Our banking partners are on top of this. It is a schedule we have agreed with our partners and we believe we can deliver on this,” he said.