Refineries: Nigeria’s $100m annual process chemical investment in recession

The N20 billion ($100m) annual investment in the Nigeria’s oil and gas process chemical industry is in recession.

The grounding to a total halt of the four Nigerian refineries causes the recession.

The refineries sited in Port Harcourt, Warri and Kaduna, which have been inefficiently producing in recent times, were grounded into a halt in September, according to data from the Nigerian National Petroleum Corporation (NNPC).

John Erinne, former president, the Nigerian Society of Chemical Engineers (NSChE), disclosed this on the sideline of the first Nigerian Oilfield Chemicals seminar organised by National Petroleum Investment Management Services (NAPIMS) and Nichem Ventures Limited in Lagos.

He urged the government to save the revenue loss from the refineries by speeding up their privatisation.

Erinne, who gave an overview of the oil and gas treatment chemical in Nigeria, maintained that an estimated investments worth $7 million to $10 million per annum could be secured if the refineries were in good shape.

“The investments can double if the refineries work,” he noted, adding that the “nature of the four refineries has effect on production of chemicals.”

He said: “If I have my way as a patriotic Nigeria, the refineries would have long been privatised. Experience has shown that the Government is a horrible businessman.”

Stating that production of chemicals is not majorly affected by the oil price rout rocking the global oil and gas industry, Erinne said: “Many chemical engineers are employers of labour and I am sure that many chemical engineers are employed in the industry. So, it is in the best interest of all of us that the oil price stabilises.”

David Adewunmi Adeyemo, chairman, Nichem Ventures Limited, added that the oil price had continued to crash and the talk of the industry was now whether there would be an industry or not.

“For us, we hold the optimistic position that the equilibrium will be found and oil production will continue in Nigeria.

“NAPIMS, which is the ultimate manager of Nigeria’s oil and gas asset and Nichem Ventures, the commercial arm of the NSChE have put this together to fashion a way out for our industry,” he said.

Sunday Sam Adefila, deputy president of NSChE, Emeka Ene, president, Petroleum Technician Association of Nigeria (PETAN), and O. Paul, a representative of the Nigeria Content Development and Monitoring Board (NCDMB), said the crude oil price rout would continue to wreck economies of oil producing nations if measures were not put in place to cushion the effects.

“The dwindling price of crude oil has made more companies to be tempted to circumvent the law in a bid to weather the storm,” Paul said, saying further “local content is a game changer and we will do everything possible within the law to discharge our constitutional representatives.”

Ene added that the industry should be sincere in providing solutions to the problem confronting the sector.

“We need to ask critical questions about the oil prices, which have continued to go south in recent times. It is only when this is done that real answers on how to overcome this will be found,” he said.