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Investors to build new refineries within old plants

By on December 18, 2015

The Federal Government is engaging private investors to build new refineries within the existing old ones, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said.

Kachikwu, who doubles as the Group Managing Director of the Nigerian National Petroleum Corporation, also stated that two of the country’s existing refineries might come back on stream before the end of this year.

In September, the national oil firm’s boss gave a 90-day performance ultimatum to the management of the Warri Refining, Port Harcourt and Kaduna Refining and Petrochemical companies.

The minister, according to a statement issued by the NNPC spokesperson, Mr. Ohi Alegbe, on Wednesday, unfolded the Federal Government’s plans for the refineries during an interactive session with members of the National Assembly in Abuja.

Kachikwu, who expressed his readiness to work closely with the National Assembly to ensure the speedy growth and development of the oil and gas sector, informed the legislators that from the available reports at his disposal, two of the refineries might be re-streamed before the end of this year.

The minister added that “efforts are on to engage private investors to build new refineries within the old ones to enable the refineries to share power, pipelines and other resources.”

He further noted that the average national oil production as of July stood at 2.1 million barrels per day and that the Nigerian Petroleum Development Company equity production was 99,000 barrels per day.

Kachikwu said the declining Joint Venture reserves were due to inadequate and low investment in the oil assets, stressing that the issue of funding constraints must be addressed going forward with the collaboration of private and international investors.

He noted that the average gas to power generation was about 3,000 megawatts and domestic gas supply of one billion standard cubic feet, with the contribution of 600 million standard cubic feet from NPDC.

According to him, the new agenda for the oil and gas industry is centred on having the right people, doing the right things, at the right time for the right purpose in order to yield the right results.

The minister stated that he would ensure that the Nigerian content policy transformed the oil and gas industry into the economic engine for job creation and national growth.

Kachikwu explained that he was obliged to cancel the Offshore Processing Agreements, crude-for-products exchange arrangement and other unprofitable arrangements in a bid to avoid rent seekers and add value to the Nigerian hydrocarbon resources.

On the downstream sector, he advocated the introduction of a private sector model that would reinvigorate the efficient supply and distribution of petroleum products, especially in the area of pipeline assets.

The minister said the menace of pipeline vandalism had resulted in huge losses of crude and petroleum products, adding that 27,967 incidents of pipeline vandalism were recorded in the last few years.
[Punch]