Oil & Energy
Modular Refineries Panacea To Petrol Importation
It is not in doubt that Nigeria is one country that is beautifully endowed with natural resources, especially hydrocarbon. She is rated the largest oil producer in Africa and the sixth in the Oil Producing and Exporting Countries (OPEC). She was the fifth largest supplier of crude to the United States of America (USA) until the shale gas discovery, an alternative source of energy, and the eleventh in the world.
Recently, at a three-day annual conference and exhibition of the Society of Petroleum Engineers (SPE) Nigeria in Lagos, the Petroleum Minister, Mrs Diezani Alison-Madueke, said critically the nation’s crude oil reserve was over 36 billion barrels and a current production capacity of about 2.5 billion per day which she acknowledged have made Nigeria the highest supplier of crude oil.
Alison-Madueke also expressed government’s determination to meet the oil reserve’s growth target of 40 billion barrels and an increase in production capacity to 4 million barrels per day by 2020. But the country still remains a net importer of petroleum products.
It is based on the premise that Nigeria being so richly endowed with crude oil but keeps importing refined petroleum products that stakeholders in many fora do not hesitate to condemn this action. Some describe it as a shame and scandalous.
Presenting a paper titled, “Sustainable Refinery Turnaround Maintenance” at the First International Conference on Petroleum Refining and Petrochemicals in Port Harcourt recently, Engr Tony Ogbuigwe, Group Executive Director Refining and Petrochemicals, Nigerian National Petroleum Corporation (NNPC) disclosed that within the past five years, the sub-optimal refinery capacity utilisation in the country averages about 20 per cent, while the bench-mark elsewhere was 60 to 80 per cent.
Mr Reginald C. Stanley, Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA) also delivering a paper at the same conference buttressed on the non-functional and low capacity utilisation of the nation’s refineries saying that the four local refineries with the capacity of 445,000 bpd capacity could only contribute about four to twenty per cent in the past five years to the national Petroleum Motor Spirit consumption.
Therefore, getting the four existing refineries to function efficiently is indeed a long term solution to meet the domestic demand for petroleum products in the country.
The President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Babatunde Ogun was quoted as saying that “If the TAM of the four refineries are done, which is supposed to be like 24 months give or take …. We would have been able to achieve about 80 per cent of what we expect if all of them are working maximally”.
However, some industry experts say with the four refineries functioning maximally they could still not adequately meet our local demand. Besides, there are other neighbouring countries that depend on us for these products. How do we meet this demand when the four refineries, at peak production, could barely meet domestic demand?
The need for a change of paradigm from a net importer of refined petroleum products to a major net exporter with our richly endowed raw material makes the call by Professor Godwin Igwe for the establishment of a modular refinery in each of the 36 states of the federation necessary. There is no nation, the world over, that can attain riches by exporting its raw materials without having a vibrant industrial base.
According to Prof. Igwe, to be a net exporter of refined petroleum products, the establishment of modular refineries in the 36 states of the federation is a must.
He said modular mini-refineries can provide flexible and cost effective supply option for crude oil producers in remote areas and very useful where there was a need to adapt rapidly to meet local demand.
He explained that with modular refineries which have relatively low capital cost, easy to construct and high speed, unit modules from 4,000 bpd up to 30,000 bpd primary distillation capacity could be produced. It could also be improved with debottlenecking to create a refinery of 100,000 bpd production capacity or more, he noted and added that they are usually prefabricated in workshop conditions and shipped to site for assembly.
Close proximity to crude supply, nearness to sizeable market and with logistic advantages which would decrease high distribution costs in remote regions, project finance on preferential terms from development credit agencies and some government incentives to regional development were some of the conditions required to make investment in modular refineries workable.
Explaining further on refinery investment, the professor in chemical engineering said, “the overall economics or viability of a refinery depends on the interaction of three key elements: the choice of crude oil used or crude state; the complexity of the refining equipment or refinery configuration; and the desire type and quality of products produced or product state.
Prof. Igwe, however, acknowledged that due to the importance of crude oil to the petroleum refining industry, the transportation cost associated with moving it from the oil field to the consuming regions and the crude qualities have made it more economical for distant refineries to use imported crude. But pointed out that similar factors have led some countries to the development of modular mini-refineries in crude producing regions since locating them close to the source of crude minimizes the logistics and distribution cost.
Instances of countries that have adopted the use of modular refineries include Papua New Guinea, Eromanga, Queensland Australia, Indonesia, Iran and Iraq.
In view of the foregoing, the effort of the federal government in signing a Memorandum of Understanding (MoU) with Petroleum Refining and Strategic Reserve (PRSR) Ltd and Vulcan Capital Corporation (VCC) Ltd for the establishment of six modular refineries in the country is very commendable.
The NNPC said in a letter that “the establishment of modular refineries is practicable and desirable to increase local refining capacity. The Corporation will be available to conduct detailed technical evaluation in conjunction with the investor group subsequently” and promised to make “utmost endeavour to ensure oil supply to the planned six modular refineries” but “subject to availability and location of refineries”.
This, indeed is a step in the right direction and should not only end at just six but more, may be the 36 suggested by Prof. Igwe if the nation must move from the present quagmire.
Vivian-Peace Nwinaene
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Digital Technology Key To Nigeria’s Oil, Gas Future

Experts in the oil and gas industry have said that the adoption of digital technologies would tackle inefficiencies and drive sustainable growth in the energy sector.
With the theme of the symposium as ‘Transforming Energy: The Digital Evolution of Oil and Gas’, he gathering drew top industry players, media leaders, traditional rulers, students, and security officials for a wide-ranging dialogue on the future of Nigeria’s most vital industry.
Chairman of the Petroleum Technology Association of Nigeria (PETAN), Wole Ogunsanya, highlighted the role of digital solutions across exploration, drilling, production, and other oil services.
Represented by the Vice Chairman, Obi Uzu, Ogunsanya noted that Nigeria’s oil production had risen to about 1.7 million barrels per day and was expected to reach two million barrels soon.
Ogunsanya emphasised that increased production would strengthen the naira and fund key infrastructure projects, such as railway networks connecting Lagos to northern, eastern, and southern Nigeria, without excessive borrowing.
He stressed the importance of using oil revenue to sustain national development rather than relying heavily on loans, which undermine financial independence.
Comparing Nigeria to Norway, Ogunsanya explained how the Nordic country had prudently saved and invested oil earnings into education, infrastructure, and long-term development, in contrast to the nation’s monthly revenue distribution system.
Chief Executive Officer (CEO) and Executive Secretary of the Major Energies Marketers Association of Nigeria (MEMAN), Clement Using, represented by the Secretary of the Association, Ms Ogechi Nkwoji, highlighted the urgent need for stakeholders and regulators in the sector to embrace digital technologies.
According to him, digital evolution can boost operational efficiency, reduce costs, enhance safety, and align with sustainability goals.
Isong pointed out that the downstream energy sector forms the backbone of Nigeria’s economy saying “When the downstream system functions well, commerce thrives, hospitals operate, and markets stay open. When it fails, chaos and hardship follow immediately,” he said.
He identified challenges such as price volatility, equipment failures, fuel losses, fraud, and environmental risks, linking them to aging infrastructure, poor record-keeping, and skill gaps.
According to Isong, the solution lies in integrated digital tools such as sensors, automation, analytics, and secure transaction systems to monitor refining, storage, distribution, and retail activities.
He highlighted key technologies including IoT forecourt automation for real-time pump activity and sales tracking, remote pricing and reconciliation systems at retail fuel stations, AI-powered pipeline leak detection, terminal automation for depot operations, digital tank gauging, and predictive maintenance.
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