Business
Experts List Investors’ Challenges On Building Of Refineries
If stakeholders’ submissions are anything to go by, then, the dream of the nation to increase its domestic petroleum products refining from 445,000 barrels per day (bpd) to 1,429,000 bpd may not see the light of the day.
The experts, who spoke to The Tide in Opobo Town over the weekend in separate chats, said unless issues bedeviling case of doing busines in the oil-rich Niger Delta region, and a clear cut fiscal regime are tackled, no investor will be moved to commit resources into building of refineries in Nigeria.
A petroleum expert and Managing Director of Enigma-Petro-Data Investment Company Limited, Dr. Endwell Minimah, said that Inteernational Oil Companies (IOCs), operating in the country must stop the treatment of Nigerian’s citizens like trading animals and their land as rejected colony, rather they should invest in the energy sector to retain access to the nation’s resources.
Some of the world’s largest independent oil traders, Minimah stressed, benefited for years from exporting Nigeria’s crude and in turns sell the refined petroleum products to the country without putting money into developing the sector.He emphasised that “if you have been selling to me (refined) products for eight years and you cannot put a foothold in Nigeria, then I should not be buying products from you”.
On the failed efforts to involve private sector, he maintained that in 2002, 18 License to Establish (LTE), were offered investors to build refineries by the Department of Petroleum Resources (DPR) but, of today, only one of them have come on stream with just 1,000 barrels (bpd) capacity. The petroleum scientist maintained that, the Nigerian National Petroleum Corporation (NNPC) refineries in Warri, Kaduna and two in Port Harcourt, have an installed capacity of 445,000 barrels per day (bpd), stressing that more worrisome is the fact that despite efforts to increase local refining capacity to conserve foreign exchange, Nigeria’s three refineries could only produce less than 43,743,273 million liters of fuel last month as against the nation’s daily consumption of over 40 million liters.
He said that, the country request for foreign exchange for imports of petroleum products, which currently stands at 45 percent will increase in the coming months unless something drastic is done about the spate of the refineries.
Minimah stressed further that, though the Corporation had hinted of arrangement to ramp up production from the 445,000 bpd to 1,429,000, the plan is yet to come to fruition as refineries are now operating at less than 40 capacities.
According to DPR, he said, the increase in refining capacity is to be achieved from the licensing of 25 private refineries by the Agency.
In his view, Dr Charlton Reuben Pepple, said Shell Petroleum Development Company Nigeria Limited (SPDC) cannot build a refinery in Nigeria due to the fact that there are surplus refineries across the globe, adding that refineries were no longer profitable, hence the decision of some firms to invest in the gas sector as alternative.
He said that with respect to downstream, Shell is divesting from refineries all over the world because there is ~us of refineries; Shell no longer own refineries even in the United Kingdom.
Pepple, who is the Managing Director of Afik Petro-Base Engineering Limited, Lagos, explained “that while most of the IOCs are already overburdened with the huge cost involved in operating in the upstream sector of Nigeria, question have been raised as to the economic sensibility of investing in the downstream sector.
Bethel Sam Toby