Operators advocate private sector investment to drive self-sufficiency in petroleum products

Operators in the petroleum downstream of the oil and gas industry say for Nigeria to actualise her quest for self-sufficiency in petroleum product, private sector has a huge role to play.
They also insist that this can be achieve only when the government as a matter of urgency divest its equity to below 40 percent in the existing refineries and create an enabling environment for private investment in modular refineries.
Pedro Omontuemhen, partner, PriceWaterHouseCoopers, said to actualise the country’s quest for self-sufficiency and end reliance on importation of refined petroleum products by 2019, modular refineries provide a cost effective, flexible and commercially viable option.
Omontuemhen in his presentation at the second business clinic programme organised by the petroleum downstream group of the Lagos Chamber of Commerce and Industry (LCCI) last week in Lagos, said the modular refinery was a cost effective supply option for investors, especially when diesel was the lightest yield.
He observed that the prospect of investment in modular refinery was good because it had relatively low capital cost, minimal space requirements, flexibility to meet demand, short payback, quick and easy installation.
Earlier in her welcome address, Nike Akande, president, LCCI, said, “Nigeria needs to look beyond oil,” saying it was also imperative to get right the oil and gas sector, as the potentials in the sector were still largely untapped.
According to Akande, the downstream oil sector is still grappling with many regulatory issues, “we are still largely dependent on the importation of petroleum products, which is not the right thing for our economy. As an oil producing country, we should not be importing petroleum products.”
She noted that an increase in investment in modular refinery and even bigger refineries would bring a lot of value to the Nigerian economy, adding that it would impact the economy by boosting the inflow of foreign capital into the economy; boost job creation in the oil and gas sector, among other things.
Tony Ogbuigwe, managing consultant/CEO, PEJAD Nigeria Limited, said over the past 10 to 15 years, capacity utilisation in the refineries had been poor at about 20 percent in Nigeria.
Ogbuigwe in his presentation, The Future for Gas, Petroleum Refining and Petrochemicals in Nigeria said that the future solution for the downstream sector is for government to allow for full deregulation of the downstream sector.
According to Ogbuigwe, “Government must divest its equity to below 40 percent in the existing refineries; Government equity should be managed by Nigeria National Petroleum Corporation (NNPC) as in Nigeria Liquefied Natural Gas (NLNG).
He further noted that the federal government should allow construction of large scale private refineries, allow construction of modular refineries and ensure each refinery operate an independent business model.

KELECHI EWUZIE