The Federal Government has attributed the delay in the take-off of the Greenfield refineries to the non-deregulation of the country’s downstream sector.
It said its inability to deregulate the downstream sector has scared investors away from pursuing the projects, adding that no investor would put his money where he cannot make profit.
Diezani Alison-Madueke, minister of petroleum resources, who made this disclosure at the opening ceremony of the Offshore Technology Conference in Houston, Texas, however, assured that the government was working hard to ensure that it establishes investors’ confidence to achieve self-sufficiency in crude oil refining in the country.
The Federal Government had signed a $51.8 billion (N8.1 trillion) Memorandum of Understanding (MoU) with various local and international investors between 2011 and 2012 to build 10 refineries across the country which are expected to save the country from fuel importation.
But the Federal Government has not been able to achieve much progress, as some investors have not been able to meet deadlines and progress to the next level of negotiation.
Andrew Yakubu, group managing director, Nigerian National Petroleum Corporation (NNPC), who represented the minister said that while the government is making effort to ensure that the four refineries in the country are producing up to full capacity, it is also working hard to ensure that the proposed Greenfield refineries are up and running.
She stated, “We must get the business model right. There are quite a number of issues that are wrong. No investor will want to invest in a regulated environment. Today, the petroleum product market is regulated and there are quite a number of things that are needed to be done to ensure that the business environment is conducive enough for investors to invest. The business models must be right. We are working hard to establish investors’ confidence in the Greenfield refineries.
“There are four refineries with a combined nameplate capacity of 445,000 barrels per day built in Kaduna, Port Harcourt and Warri. We have LNG plant with installed capacity of 22 million tons per annum. The country is currently implementing two additional LNG projects, which will give a total in-country capacity of over 40 million tons per annum when completed. The long-term plan is for Nigeria to become the gas hub of the sub-region”, she stated.
“The history of oil and gas exploration is replete with how new paradigms have successfully created new opportunities which hitherto were thought to be non-existent. The West African transform margin plays an excellent example of this. Prior to its emergence as a hotbed of exploration activities, the West Africa oil province was dominated by onshore and shallow water production from Nigeria, Gabon, Angola, and to some extent Equatorial Guinea”, the minister said.
She said that Nigeria has over 35 billion barrels of proven oil reserves and 187 trillion cubic feet (TCF) of proven gas reserves with plans to increase it in the next few years.
Alison-Diezani disclosed that the current crude oil and condensate production runs at over 2.4 million barrels per day and gas of over eight billion cubic feet per day.
