Operators who gathered at the third edition of the Lagos Chamber of Commerce and Industry (LCCI) Downstream Clinic in Lagos, all prescribed a leeway to increase Nigeria’s refining capacity.
With Nigeria’s refining industry suffering from low capacity utilisation, the need to become self-sufficient in petroleum refining has been a source of concern to stakeholders in the downstream sector.
Operators who gathered at the third edition of the Lagos Chamber of Commerce and Industry (LCCI) Downstream Clinic in Lagos, all prescribed a leeway to increase Nigeria’s refining capacity.
Speaking at the event, the Managing Consultant/CEO, PEJAD Nigeria Limited, Tony Ogbuigwe, attributed the low performance of the refineries to inadequate funding and lack of autonomy; poor governance; slow decision-making; poor maintenance; interference by political forces; subsidy regime, lack of competition, and inefficient delayed turnaround maintenance.
Speaking on the ways out of the numerous challenges confronting the sector, Ogbuigwe stressed the need to divest government equity in the existing refineries to below 40 per cent.
He reiterated the need to stimulate a switch over from kerosene and wood for cooking to Liquefied Petroleum Gas (LPG), which, he said, will check creeping desertification, and promote better health.
Ogbuigwe also decried the low domestic gas, noting that most of the investment projects are geared toward exports.Speaking on the theme, Modular refinery: merits and challenges, Partner. Power and Utilities, PricewaterhouseCoopers (PwC), Pedro Omontuemhen said between $1.4 and $1.8 billion of private investment is required for intervention and rehabilitation projects of existing refineries
He said to actualise the country’s quest for self-sufficiency and end reliance on imported refined petroleum products by 2019, modular refineries provide a cost effective, flexible and commercially viable option.
He said that for countries with size and complexities like Nigeria, modular refineries can be scattered throughout the country to serve the needs of the various regions of the country.
“The modular refinery is a cost effective supply option for investors especially when diesel is the lightest yield. It is distinctly attractive for relatively low capital cost, minimal space requirements, flexibility to meet demand, short payback as well as quick and easy installation of within two years.”
President LCCI, Dr (Mrs) Nike Akande, noting that it was time the nation looked beyond oil, said it is imperative for the federal government to get its policies right.
Adding that the potential in the oil and gas sector are still largely untapped.“An increase in investment in modular refinery and even bigger refineries will bring a lot of value to the Nigerian economy, as it will conserve our foreign reserve as we import less products as well make Nigeria the oil and gas hub of the African continent,” she said.
The Director, Department of Petroleum Resources (DPR), Mordecai Danteni Baba Ladan, said licensing more companies is part of efforts to encourage more private investors to key into government’s plan to ensure Nigeria is sufficient in petroleum products by 2019.
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