Stakeholders in the downstream sector of Nigeria oil and gas industry have insisted that the four refineries in Nigeria must be operated as a business concern if the federal government ever wants to solve the current low capacity utilisation.
They insisted that despite the work being done at the Nigerian National Petroleum Corporation (NNPC), to get the refineries operational at the level government is planning, it would need some good private equity participation.
Reginald Stanley, Chair, OTL African Downstream Advisory board while speaking at a panel discussion at the just concluded Oil Trading and Logistics Expo in Lagos observed that Nigeria must have very efficient refineries.
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According to him, “If we put our house in order by way of the right investment, Nigeria will automatically belong among top refining countries and what that means is that we instantly become net export of petroleum products.
Stanley observed that with NNPC supplying 445 thousand barrel per day, and Dangote refineries coming on stream with 650 thousand per day, Nigeria will be able to meet her petroleum demand needs.
He urged government through the NNPC to address the issue of regulatory environment saying that if we don’t get that right, you can talk to all the financiers in this world, they would not come to invest.
Godswill Ihetu, former Managing Director and Chief Executive Officer of the Nigeria Liquefied Natural Gas (NLNG) Limited and Nigerian Gas Company (NGC) on his part said the issue of cleaner fuel needs to be addressed for the future when talking about Nigeria refineries.
He opined that the issue of cleaner fuel becomes critical particularly for Nigeria own refineries which were built more than three decades ago.
Ihetu insists that Nigeria refineries would need substantial upgrading to be able to get to the point of getting cleaner fuel which will be in demand in the future or are already in demand.
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He further observed that petroleum pipeline infrastructure need to be replaced if the country wants to operate an efficient refinery adding that this has a major capital requirement to be able to replace them because the current pipelines have long gone beyond their good use.
According to him, “We also need private sector involvement in equity for pipelines infrastructure because to leave that to the government will be a mistake because the government resources are stretch”.
“Government needs to invite the private sector to go into the pipeline logistics. What we have now at the NNPC refineries will need a lot of work. I hope we can get a good model that will make us move forward and not talk about the refineries every year”.
Ihetu further called on managers of the economy to consider adopting the NLNG model, where 49 per cent NNPC participation 51 per cent private sector in the operation of the petroleum adding that in this model, there is no political interference.
“It is the best way to go that way because private partners bring in their expertise and these are high expenditure projects. They can bring in the finance for part of the equity which will solve problems”, he said.
KELECHI EWUZIE
