Oil & Energy
Experts Demand Refinery Operators’ Compliance With Extant Laws
Indigenous petroleum products refiners have been cautioned over attempts by some operators to monopolise the downstream petroleum sector operations.
Key industry experts and advocacy groups said monopolistic practices would destroy the industry and promote inefficiency and further drive costs to high levels.
The industry analysts were reacting to recent misunderstanding of the position of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) with regard to implementation of existing regulations to provide clement environment suitable to investors.
They also expressed concern at the cost of importation of Premium Motor Spirit (PMS) also known as petrol, which is raising fear of possible adjustment of pump price by marketers.
They also cautioned that expected downward pricing of refined products from Dangote refinery may not be feasible as cost of crude whether supplied locally and in local currency would be priced in relation to international benchmark.
Speaking on the sidelines of a one-day roundtable on “The Midstream and Downstream Petroleum Industry in Nigeria: The Roles of NMDPRA in ensuring Energy Security”, held in Lagos, at the Weekend, one of the discussants and energy expert, Henry Adigun, said “as at Wednesday July 31, 2024, landing cost of petrol is N1,100 per liter aside from associated costs of trucking the product to dispensing outlets”.
Adigun insisted that Nigerians should not expect a low priced product from Dangote Refinery given that the quality of products from the facility is of high premium with the crude pricing supply to the refinery not lower than what it is sold in the international market.
According to him, the Nigerian National Petroleum Company Limited (NNPCL) is not going to sell crude below cost of production and since crude is an international product, Nigeria must be guided by international best practices.
He also warned about ongoing subsidy on petrol which has made the market uncompetitive, which he also said would continue to create disruptive supply arrangements.
In his submission, Adigun called for a substantial review of fiscal policies that will entrench competition and strong regulatory environment.
Earlier in his review of the Downstream market, another industry expert, Taiwo A. Ogunleye, said petroleum has remained an important part of both the world’s energy mix and the global economy and keystone of our modern energy system helping to drive the global economy.
He noted that petroleum plays an essential role in shaping our lives from fuelling vehicles and generating electricity to producing a wide range of everyday products and involves a wide range of commercial activities from the exploration of reserves deep in the ground to the sale of the final product to the end customer.
The industry is frequently shown in the form of a ‘value chain’, specifically a set of activities performed sequentially in order to deliver a final product, and includes upstream, midstream and downstream sectors.
Ogunleye also noted regulatory issues as key to creating efficiency and transparency in the value chain.
Citing a Report issued by the Oil, Gas, and Mining Policy Division of the World Bank, he agreed that “Inadequate regulation and enforcement can also harm the efficiency of fuel supply.
“Sector regulations that have not been updated in decades, lack sufficient coverage, or list outdated fuel specifications may deter entry of experienced operators adhering to high standards”.
He stated that an efficient legal framework for the downstream petroleum sector requires legislation that clearly defines and limits the role of the government in order to avoid undue interference and establishes principles and rules for the private and public participants in the supply chain in order to create a level playing field and promote fair, transparent, and healthy competition.
Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended
Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has called on Nigerian companies to position themselves strategically to take full advantage of the growing opportunities in upcoming offshore and shallow water oil and gas projects.
The Managing Director, SNEPCO, Ronald Adams, made the call at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF) Conference, held in Yenagoa, Bayelsa State, last Thursday.
Adams highlighted the major projects, including Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension, as key areas where Nigerian businesses can grow their capacity and increase their involvement.
“Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) says Nigerian companies have a lot to benefit if they are prepared to take advantage of more opportunities in its offshore and shallow water oil and gas projects.
“Projects such as Bonga Southwest Aparo, Bonga North and Bonga Main Life Extension could grow Nigerian businesses and improve their expertise if they applied themselves seriously to executing higher value contracts”, Adams stated.
Adams noted that SNEPCo pioneered Nigeria’s deepwater oil exploration with the Bonga development and has since played a key role in growing local industry capacity.
He emphasized that Nigerian businesses could expand in key areas like logistics, drilling, and the construction of vital equipment such as subsea systems, mooring units, and gas processing facilities.
The SNEPCO boss explained that since production began at the Bonga field in 2005, SNEPCo has worked closely with Nigerian contractors to build systems and develop a skilled workforce capable of delivering projects safely, on time, and within budget both in Nigeria and across West Africa.
According to him, this long-term support has enabled local firms to take on key roles in managing the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which reached a major milestone by producing its one-billion barrel of oil on February 3, 2023.
The Emohua Local Government Area Administrator, Franklin Ajinwo, has pledged to improve electricity distribution in Oduoha Ogbakiri and its environs.
Ajinwo made the pledge recently while playing host in a courtesy visit to the Oduoha Ogbakiri Wezina Council of Chiefs, in his office in Rumuakunde.
He stated that arrangements are underway to enhance available power, reduce frequent outages, and promote steady electricity supply.
The move, he said, was aimed at boosting small and medium-scale businesses in the area.
“The essence of power is not just to have light at night. It’s for those who can use it to enhance their businesses”, he said.
The Administrator, who commended the peaceful nature of Ogbakiri people, urged the Chiefs to continue in promoting peace and stability, saying “meaningful development can only thrive in a peaceful environment”.
He also charged the Chiefs to protect existing infrastructure while promising to address the challenges faced by the community.
Earlier, the Oduoha Ogbakiri Wezina Council of Chiefs, led by HRH Eze Goodluck Mekwa Eleni Ekenta XV, expressed gratitude to the Administrator over his appointment and pledged their support to his administration.
The chiefs highlighted challenges facing the community to include incessant power outage, need for new transformers, and the completion of Community Secondary School, Oduoha.
The visit underscored the community’s expectations from the LGA administration.
With Ajinwo’s assurance of enhancing electricity distribution and promoting development, the people of Oduoha Ogbakiri said they look forward to a brighter future.
By: King Onunwor