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Modular Refineries Panacea To Petrol Importation

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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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Rivers PETROAN Elects 12-Member Executive 

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The Petroleum Products Retail Owners Association of Nigeria (PETROAN), Rivers State Branch, has elected a 12 – member executive to steer the affairs of the association for the next four years.
The executive, elected during the Annual General Meeting (AGM) of the association, at it’s secretariat in Port Harcourt, and sworn in immediately after the election, was mandated to, among other things, tackle the adulteration of petroleum products as well as address irregularities in meter readings across the state.
The newly elected executive include, Pastor Ezekiel I. Eletuo  as  Chairman,  Kanu Addeson C. as Vice Chairman , Dr. Ejike Jonathan Nnbuihe as Secretary,  Fidelis A.Inaku as Treasurer and Lady C. N. Ekejiuba as Financial Secretary.
Others are Anaenye Anthony as Publicity Secretary, Arc. Kingsley O. Anyino as Organising Secretary, Nze Peter Ezenwa as Chief Whip, and Sunny Williams as Auditor.
Other members of the executive included Chidiebere Ronel Akwara as Welfare Officer, Ibe Chimaobi C. as Legal Adviser, and Emetoh Chizoba as Assistant Secretary.
Inaugurating the new leadership, PETROAN Zonal Chairman, High Chief Sunny G. Nkpe, charged the team to build on the achievements of the outgoing executive.
He urged them to collaborate with stakeholders in the petroleum sector to ensure industry stability and address issues of multiple taxation.
Nkpe who emphasized the need for transparency, accountability, and an open-door policy in administering the union, insisted these principles remained crucial in advancing the association’s objectives and improving members’ welfare.
The zonal chairman also commended the outgoing executive for their accomplishments during their tenure and for conducting a smooth transition process.
He further described their efforts as instrumental in strengthening the union’s standing in the state.
In his acceptance speech, the new Chairman, Pastor Ezekiel I. Eletuo, thanked members for their confidence and pledged to improve on the foundations laid by the previous administration.
He promised his leadership would be guided by transparency, accountability, fairness, unity, and integrity.
Eletuo called on all members to support the new executive in its efforts to elevate the association.
Also speaking, the immediate past Chairman, of the association, Sir Chilam Francis Dimkpa, expressed appreciation to members for their support during his administration and stressed the need for them to extend the same cooperation to the new leadership.
Dimkpa highlighted key achievements of his tenure to include capacity building for members, increased union visibility through media advocacy, and the establishment of stronger ties with stakeholders, corporate organisations, and individuals.
He also acknowledged the support of the state government, the Police, the Department of State Services (DSS) and the Nigeria Security and Civil Defence Corps (NSCDC).
Stakeholders present at the event also delivered their goodwill messages.
Highlights of the event included  administration of oath of office to the new executive and the presentation of certificates of return by the zonal chairman.    .
By: Amadi Akujobi
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FG Intensifies Efforts To Reposition Tourism Sector 

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The Federal Government has intensified efforts towards reposition Nigeria’s hospitality and tourism industry for global competitiveness, aimed at strengthening regulation, professionalism and workforce standards across the sector.
This was made known last week when the National Institute for Hospitality and Tourism (NIHOTOUR) conferred  fellowships, inducted professionals and inaugurated the governing boards of the Hospitality and Tourism Sector Skills Council of Nigeria (HTSSCN) in Abuja.
The high-profile event, held at Merit House, Maitama, drew senior government officials, regulators, tourism operators, cultural institutions, hospitality investors and development partners in what stakeholders described as a major institutional shift .
Government also formally inducted registered practitioners into various professional categories while also inaugurating the Board of Trustees and Board of Directors of the HTSSCN, an employer-led platform designed to align workforce competencies with industry expectations.
Speaking at the event, the Minister of Art, Culture, Tourism and the Creative Economy, Hannatu Musa Musawa, said the initiative represented a strategic intervention to strengthen accountability, standards and institutional coordination within Nigeria’s tourism and hospitality ecosystem.
According to the minister, Nigeria’s vast cultural assets, tourism destinations and creative talents can only translate into sustainable economic value through professionalism, regulation and globally accepted operational standards.
She noted that tourism and hospitality industry remains one of the fastest-growing sectors globally, contributing significantly to employment generation, foreign exchange earnings and cultural diplomacy.
Musawa explained  that NIHOTOUR Establishment Act has expanded the institute’s mandate beyond training, positioning it as a regulatory and certification authority for hospitality, tourism and travel practitioners in the country.
“No sector can attain sustainable growth without structure, standards, institutional coordination and skilled professionals,” she said, stressing the need for stronger collaboration between government agencies, operators, training institutions and private sector stakeholders.
In his keynote address, the Director-General and Chief Executive Officer of NIHOTOUR, Abisoye Fagade, described the event as a historic turning point in the formalisation of Nigeria’s tourism and hospitality industry.
Fagade said the induction of practitioners, conferment of fellowships and inauguration of the HTSSCN governing boards marked the beginning of a new era of institutional governance, professional recognition and sector-wide coordination.
“Regulation and standardisation are no longer optional; they are economic necessities if Nigeria truly intends to compete globally,” he stated.
By:  Nkpemenyie Mcdominic, Lagos
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Big Oil Reconsiders Previously Unattractive Destinations

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The Middle Eastern crisis has prompted a reprioritization among international oil companies. Previously unattractive drilling destinations are suddenly looking quite attractive—even Alaska.
The oldest oil and gas producing part of the United States has for years been out of the spotlight as the industry moves to cheaper and faster-growing locations. The only news of any substance about Alaska recently was the Biden administration’s approval of the Willow project, led by ConocoPhillips, which was set to boost the state’s oil output by 160,000 barrels daily, and Australian Santos’ Pikka project, set to start commercial production this year. That was years ago. Now, Big Oil is eager to drill in Alaska.
Earlier this month, a lease sale in the National Petroleum Reserve in Alaska attracted record bids, worth a total $163 million. Among the bidders were Exxon, Shell, and Repsol, with the latter already partnering with Santos on the Pikka development. And this may be just the beginning.
Related: Saudi Aramco Looks to Raise $10 Billion from Real Estate Asset Deal
The Bureau of Land Management offered 625 tracts across about 5.5 million acres for bid in the sale, revived at the end of last year by the Trump administration. No lease sales were held in the National Petroleum Reserve in Alaska under President Biden. Yet under Trump’s One Big Beautiful Bill, there will be a total of five lease sales in Alaska over the next ten years.
“With the imminent start-up of the Pikka project on the North Slope, the reversal in the decline of oil production in the great state of Alaska is going to help put more oil in the Pacific area at an important moment,” Repsol’s head of upstream operations, Francisco Gea, said as quoted by the Financial Times. Gea called Alaska “a fantastic opportunity”. The Pikka project, which has a price tag of $4.5 billion, will produce up to 80,000 barrels daily.
It is indeed a fantastic opportunity, at the very least because it is nowhere near the Middle East and as such is a highly secure energy exploration destination. Canada is in a similar position, by the way: the head of the International Energy Agency earlier this month told an industry event Canada had a golden opportunity to step in as a secure energy supplier in a world that’s currently 14 million barrels daily short on supply because of the Middle Eastern crisis.
Security, then, is what has prompted Big Oil to return to the North—even Shell, which left in 2015 after writing off as much as $7 billion on an unsuccessful drilling campaign hampered, among other things, by strong environmentalist opposition. According to the Financial Times, the supermajor’s decision to partake in the latest Alaska lease sale was surprising for analysts.
However, according to chief executive Wael Sawan, the lease sale concerns a different part of the state. “It is a very, very, very different part of Alaska that we have gone to,” he told the Financial Times. “This is an onshore exploration opportunity in a very well-established basin that has been producing for some time… So this is not offshore Alaska where we have had the challenges in the past.”
Crude oil is not the only thing drawing the energy industry to Alaska in these times of oil and gas trouble. Gas is also a magnet—in this case, in the form of the Alaska LNG project. Interest in the Alaska LNG export project has spiked since the war in the Middle East choked 20% of global LNG supply and sent Asian buyers scrambling for expensive spot cargoes.
Glenfarne Group, the majority owner and developer of the facility, aims to sign binding offtake agreements with buyers soon and advance final investment decisions to later in 2026 and early 2027, company executives told media earlier this year on the sidelines of an energy conference in Tokyo.
“There’s a real interest, particularly with everything happening in the Middle East right now. Everyone would like to get those (preliminary deals) turned into long-term agreements,” Adam Prestidge, president of Glenfarne Alaska LNG, told Reuters in March.
Alaska LNG is designed to deliver North Slope natural gas to Alaskans and export LNG to U.S. allies across the Pacific. An 800-mile pipeline is planned to transport the gas from the production centers in the North Slope to south-central Alaska for exports. In addition, multiple gas interconnection points will ensure meeting in-state gas demand.
The latest Alaska developments show clearly how the Middle East war has put energy security back in the spotlight, making previously challenging locations desirable again. With an estimated 1 billion barrels of oil supply wiped out of markets since the war began, according to Aramco’s Amin Nasser, alternative supply sources have become urgently needed, and not just for the short term. Even if the Strait of Hormuz reopens soon—which at the moment seems unlikely—energy security will in all probability remain a top priority both for energy producers and for consumers.
By Irina Slav for Oilprice.com
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