To stem wave of petroleum products scarcity and attendant economic loses professionals in the oil industry advocate quick action on refineries
Indigenous technocrats in the petroleum industry have demanded that the federal government activates measures that would immediately fix the nation’s refineries to save the economy from intractable fuel supply crisis.
They also called on government to drive rapid development of the midstream and downstream segments of the sector in order to optimize the value of the resources.
The speakers drawn from all professional associations in the petroleum industry at a workshop to lay agenda for the government, chorused on the need for government to reverse the nation’s embarrassing paradox of intractable fuel scarcity by harnessing and optimizing internal capacity for refining.
The event was hosted in Lagos by the National Association of Petroleum Explorationists (NAPE), and featured invited participants from Society of Petroleum Engineers (SPE), Petroleum Technology Association of Nigeria (PETAN), Nigerian Mining and Geosciences Societry (NMGS) and government regulatory agencies.
Chairman of the Nigerian Council of the global Society of Petroleum Engineers (SPE), Mr. Emeka Ene, who spoke on “Quickwins For Energy Sector Reforms,” called on government to drive the ongoing rehabilitation of the local refineries to conclusion even it plans to sell the plants afterwards.
He traced the history of activities in the country’s coastal waters and pointed out that the trend and nature Nigeria’s exports have not changed from raw resources to manufactured products in the past 100 years.
According to him, Nigeria’s exports which have shifted over centuries from slaves, raw materials to crude oil have remained revenue targeted without full resource value for the local economy.
From slaves to ground nuts, cotton, palm oil, cocoa and crude oil, he observes, the country has continuously shipped out factors of economic growth opportunities to other countries in exchange for resource revenue.
He decried the current reliance on imported petroleum products to meet the country’s internal fuel needs as a regrettable paradox in the fate of a nation that holds the reputation of key supplier of crude oil to the global energy markets.
Mr. Ene, who is also the Chairman of Petroleum Technology Association of Nigeria (PETAN), pointed out that time has come to take realistic approach to tackling illegal refining enterprises in the country, saying adoption of modular and micro-refining models in the Niger Delta would bring the illegal refineries under technical regulation, mitigate spills and sundry environmental impact, address issues of substandard products from the illegal refineries, and contribute significantly in meeting internal fuel demand.
He also stressed that adoption of modular refineries at crude production sites would rule out crude oil stealing and associated facility vandalism, explaining that crude oil thieves mainly attack export pipelines as operators try to push their output to terminals.
Besides, a clustered arrangement in adoption of micro-refining options would make it more cost effective to locate numerous small scale refineries close to sources of crude oil supply in order to optimize use of facilities and maximize economies of scale.
He pointed out that government has little option but to legalize the illegal refineries, bring them under regulation and position them to attract credible investors.
Mr. Ene, whose Oildata Group provides technology solutions systems processes in all segments of the industry, said that current studies have shown that the illegal refineries might continue to be a huge drag on the nation’s petroleum industry if they were not quickly harnessed and transformed into clean enterprises. He pointed at huge distribution and retail businesses that are ancillary to the illegal refinery as a prime index of the huge market they control in the Niger Delta region.
He said that the gross domestic product (GDP) of the illegal refineries is so huge that the black industry affords over $9000 per capita income to workers in the illegal business.
He pointed out that government must adopt a replacement strategy that would regionalize the modular refining process, create linkages for the business by allocating crude oil to players and monitoring standard compliance.
He concluded that liberalization of the midstream and downstream ends of the industry would open up opportunities for all levels of entrepreneurs to tap into the commercial incentives afforded by the acute fuel supply in the domestic market.
Also speaking, Dr. Mohammed Ibrahim of the Energy Commission of Nigeria pointed out that modular refinery model which has been vigorously canvassed but yet to be adopted by regulators in the country has already been adopted in neighbouring Niger and Chad republics.
He said while Nigeria has remained a huge fuel importer, less endowed land locked countries have started tapping into Nigeria market to sell products from their small refineries.
He revealed that motorists in the north western part of the country currently receive petroleum products from a modular refinery sited close to Daura in Katsina State, while consumers in northeast also patronize similar modular refinery from neighbouring Chad.