The Minister of State for Petroleum, Timipre Sylva has revealed that the rehabilitation of the 60,000 bpd refinery is being completed and is going to be started by Q1 2023 as promised.
Sylva made this known while giving an update on the Port Harcourt refineries during the ministry of petroleum resources 2022 scorecard in Abuja on Monday.
He said that the promise made was not to complete the rehabilitation of the refineries by May 2023, but that the fuel plant will be rehabilitated by the end of Q4 2022.
“Our promise has been that the 60,000 bpd plant within the Port Harcourt refinery by the end of Q4 2022, it is being completed and is going to be started by Q1 2023 as promised,” he said.
Speaking on subsidy payments, the minister said it is not sustainable adding that it also has an adverse impact on the activities of agencies under the sector.
“As a country, it is a national consensus now that this subsidy is not sustainable; what is desirable is to ensure that petroleum price is market driven and it will also drive investments from the private sector,” he said.
He also said the profitability of refineries under a subsidy regime will also be difficult, adding that the money spent on subsidy can be deployed to other developmental projects like refinery development and also increase funds for the government.
“Let us remove subsidy so that the government will have more money to deploy to the development of things that will be useful to all of us as a country,” he said.
In his address, the minister said that some strategic priorities of the sector include eradicating smuggling of PMS across Nigerian borders, completing the gas flare commercialization program, increasing crude oil production to 3 million barrels per day, reducing the cost of crude oil extraction by at least 5 percent, boosting private sector partnership to increase domestic refining capacity, creating jobs and eradicating poverty.
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He added that activities and efforts from agencies under the ministry such as NMDPRA, NCDMB, NNRA, PTDF, PTI, NURPC and NNPC were also geared towards achieving the priorities.
Highlighting progress achieved on the eradication of PMS movement across Nigeria’s borders, he said 255,659 trucks out were equalized at 66.7 million litres average daily sufficiency, while 1277 supplying vessels were tracked and over 25 billion litres of total PMS was discharged with N173 billion equalization paid.
“However key issues encountered include marketers’ infraction, defaulting marketers, delay in submission of product out turn form by marketers, arrival/ discharge quantity variation and sharp practices by operators,” he said.
In order to achieve the target completely, he said there is need for full system automation, a review of existing penalties, ensuing strict compliance to regulations and strong inter agency collaboration and transparency for petroleum product supply value chain activities around the border.
For the gas flare commercialization program, the minister said so far, 48 flare sites has been identified with plans that they will be allocated by the fourth quarter of 2022, also there has been an 8.6 percent change in domestic LPG demand while the ongoing evaluation studies is 50 percent completed.
He however called for more sensitization for operators and users as well as more collaboration between sector regulators and industry players.
Regarding enhanced partnership with the private sector operators to increase domestic refining capacity, Sylva said some of the targets include the establishment of condensate refineries, complete valuation for rehabilitation of the four existing refineries, establishment of the modular refinery intervention fund and the establishment of crude oil domestic supply obligation.
“We have issued licenses to prospective investors for the establishment of refineries, some private operators established modular refineries like Walter Smith, Azikel, Anoh, Duport, while existing refineries are being rehabilitated,” he said.
He revealed that the federal government also has a 20 to 30 percent equity stake in private refineries like Duport refinery (30 percent), Walter Smith (30 percent), Azikel (20 percent), as well as Dangote (20 percent).
Sylva said some challenges include crude supply obligation for completed refineries and funding support for modular refineries, hence he asked that an intervention fund be established at the CBN.
Speaking on product supply and the intervention of the DSS, Sylva said there are various players, marketers, suppliers filing stations and also people trying to cut corners hence the DSS will come in as a law enforcement agency to correct the infractions.
Mele Kyari, Group Managing Director, Nigeria National Petroleum Company Limited, NNPCL, while reiterating an update on the Port Harcourt refinery said the total rehabilitation of the refinery will take 42 months from the day the contract was awarded, and is done on basis and by plants.
“Our promise is to start up the fuel plant which is the 60,000 barrels per day component of this activity which was to commence by the last quarter of 2022 but this was not practical but we will start this up by the first quarter of 2023,” he said.
In his address, Lai Mohammed, Minister of Information and Culture, said beyond unprecedented infrastructure development, the Muhammadu Buhari administration is leaving behind legacies of revamped security, social investment, self-sufficiency in staples and probity among others.
“Our pace-setting social investment programmes like N-Power, School Feeding, Conditional Cash Transfer and GEEP (Government Enterprise Empowerment programme) have benefitted millions of our citizens, both young and old, and this can neither be trivialised nor denied,” he said.
He said under this administration, fertilizer blending plants in the country had increased from 10 in 2015 to 48 while the number of rice mills had increased significantly which caused Nigeria’s import of rice from Thailand to drop significantly
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