Refining Costs Up on Transporting Crude Oil by Ship – Alison-Madueke

The cost of refining domestic oil in Nigeria has increased by $7.52/barrel after the government’s decision to transport crude to three state-run refineries by ship in a bid to bypass damaged pipelines, oil minister Diezani Alison-Madueke said.
“Due to theft-related vandalism, crude oil supply to our refineries remains constrained, thus affecting uptime and volume. In order to mitigate this anomaly, the option of crude transportation by marine vessel has been deployed thereby increasing the operating cost of refining by an additional sum of $7.52 per barrel,” Alison-Madueke said in a speech to an industry conference Wednesday.
She did not give the current cost of refining crude at the refineries.
State oil company Nigerian National Petroleum Corp, which manages the refineries, announced last week that it had resorted to shipping crude oil to its three refineries — the 125,000 b/d Warri refinery and two in Port Harcourt with a combined nameplate capacity of 210,000 b/d — because of frequent hacking into pipelines that transport crude from Chevron, Shell and Eni operated fields. The refineries have been operating intermittently because of the resulting disruption to crude supply.
Alison-Madueke said that pipeline vandalism not only affected the refineries but also crude production and exports.
“In 2013, we sustained an average crude oil and condensate production of 2.3 million b/d and gas production of 7.6 Bcf/d despite crude oil theft and pipeline vandalism. Average crude oil theft and deferment during the same period were 215,000 b/d,” the minister said.
Source: Platts

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