• Monday, June 17, 2024
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Poor petroleum downstream investments worsening fuel scarcity – Pinnacle Oil CEO Mbah

Poor petroleum downstream investments worsening fuel scarcity – Pinnacle Oil CEO Mbah

The current scarcity of petroleum products has been ongoing for the past two months and it seems there is no end in sight having defied all efforts at remedy. But this situation could have been avoided, operators say had the right investments backed by the right government policies been made.

With the state-owned firm playing an out-sized role in the petroleum products distribution acting as the sole importer because government approved prices cannot guarantee commercial returns for marketers, appetite for investments in new distribution infrastructure stalled.

Peter Mbah, founder and CEO of Pinnacle Oil and Gas Limited after a recent visit to the President Muhammadu Buhari echoed this view when he said that inadequate and lack of investments in the downstream of the oil and gas sector was responsible for the incessant petroleum products’ scarcity being experienced across the country.

Commenting on the issue while speaking with newsmen at the State House, Abuja, the Pinnacle Oil boss attributed the cause of the crisis to a deficit of investment in the downstream sub-sector, a problem, which he said his firm, Pinnacle Oil and Gas, had started solving with the inauguration of the largest storage terminal in West Africa in Lagos last year.

Pinnacle Oil and Gas Ltd recently completed a first-of-its-kind petroleum products terminal off the coast of Lagos that would allow for intake and offtake of refined petroleum products from mother vessels through an undersea pipeline to its terminal in Lekki.

The facility which was conceived in 2011 gulped over $1billion worth of investments from a consortium of local and international lenders and required multiple approvals up to the Federal Executive Council and earned the company a local content award for the liberal use of local skill.

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The Pinnacle Lekki petroleum products Terminal is an ultra-modern purpose-built products intake, storage, and offtake facility conceptualised to revolutionise the Nigerian downstream oil and gas industry by enabling the direct delivery of petroleum products from large vessels which would otherwise have been unable to berth anywhere on the Nigerian coastline.

The facility is a game changer as it eliminates the need for expensive vessel lightering, reduces the incidence of demurrage for visiting mother vessels, cuts losses that typically occur during lightering operations, and leads to significant savings for vessels berthing at the Terminal as opposed to berthing at any of the other mooring facilities in the Lagos area.

Mbah said more investments of this nature will dent the current fuel scarcity experienced across the country.

“There has been a deficit of the sort of investments Pinnacle has done in the last decades, but what we’re doing right now is to address that stagnation of investments in the downstream oil and gas industry.

“As you know, this is an investment size of about $1 billion. So we are expecting to see more of such investments because what the Pinnacle has done is to create some efficiency in the supply and distribution value-chain of the downstream sector.

“So we are indeed expecting that more investment in the downstream sub-sector would completely eliminate the sort of scarcity you are witnessing today”.

On why he came in the company of Nasiru Ado-Bayero, the Chairman of Pinnacle Oil and Gas, who is also the Emir of Bichi Kingdom in Kano State, to see the President, Mbah said it was to appreciate Buhari for inaugurating the company’s huge facilities at Lekki, Lagos State, in October, 2022.

According to him, the facilities’ activities had lowered costs and improved the distribution of petroleum products to many areas in the country while also easing traffic in the Apapa area of Lagos and had provided valuable job opportunities for many Nigerians.

“We, Pinnacle Oil and Gas Limited, have come here today to express our profound gratitude and our heartfelt appreciation to Mr. President.

“You will recall that on the 22nd day of October, 2022, Mr. President inaugurated our storage terminal, adjudged to be the largest storage terminal in West Africa, with offshore intake facilities, also adjudged to be the deepest intake facility in the entire Africa, sitting at a water depth of 23 meters.

“So we do have SPM and CBM. Those are the offshore facilities we have. Those facilities have the capability to in-take the largest vessels you can imagine and discharge over 100 million liters of clean petroleum products within 24 hours. This is typically what takes the industry 30 to 32 days to discharge.

“So we have largely come here today to express our gratitude to Mr. President for the honour he gave us in inaugurating this largest facility, which has actually changed the face of the industry, because it has eased, as you know, this facility is located at the Lekki Free Zone, just by the Dangote Refinery,” he said.

Mbah added: “So what it has done, it has eased the congestion and the gridlock we have at the Apapa area in Lagos. It has also reduced the costs of supply and delivery of petroleum products in different parts of the country. It has also provided jobs for teeming unemployed Nigerians.

“So this is why we thought it necessary to come and say thank you to Mr. President.”

The current fuel scarcity has pitched marketers against the regulator with the citizens caught in the middle. Analysts say deregulating the petroleum downstream sector will drive in faster the sought of investments that will eliminate fuel scarcity in the country.