Government moves to achieve 2,050bpd refining capacity

• Nigeria targets self-sufficiency by 2019
• Nine companies submit bids for co-location of new refineries

Nigeria is on the path of self-sufficiency in the production of petroleum products as the Federal Government has introduced strategies to increase the country’s refining capacity to about 2.050 million barrels per day of crude oil.

This was almost the nation’s daily production of about 2.2 million barrels per day (bpd) before the current attacks on oil facilities in the Niger Delta.

Already, the Department of Petroleum Resources (DPR) has issued licences to 25 investors to build modular and conventional refineries with capacity to process about 1.429 million barrels per day.

Also, nine companies have submitted bids for co-location of new refineries within the complexes of Nigeria’s three existing refineries in Kaduna, Warri and Port Harcourt, which are expected to increase the nation’s refining capacity from 445,000 barrels per day (bpd) to 650,000bpd.

Though Dangote Refinery initially applied for a licence to build a 500,000 barrels per capacity facility, it has since increased the capacity to 650,000 bpd to meet local and international demand.

Specifically, a list of current private refinery’s licensees posted on DPR website showed that about 25 companies have signified interest to build refineries with capacities ranging from 5,000bpd to 500,000bpd.

These refineries, when completed, are expected to produce Premium Motor Spirit (PMS), House Hold Kerosene (HHK), Low Pour Fuel Oil (LPFO)) and Automotive Gas Oil (AGO) currently being imported into the country.

Some of the companies issued licences include Dangote Oil Refinery Company with capacity to produce 500,000bpd; Resource Petroleum & Petrochemicals International Incorporated, 100,000bpd; Hi Rev oil Limited, 50,000bpd; Aiteo Energy Resources Limited, 100,000bpd; Epic Refinery and Petrochemical Industries Limited, 107,000bpd; Petrolex Oil and Gas Limited, 107,000bpd; and  Eko Petrochem and Refining Company Limited with capacity to produce 20,000bpd.

Others are Capital Oil and Gas Limited, 100,000bpd; Master Energy Oil and Gas Limited, 30,000bpd; Kainji Resources Limited, 24,000bpd; Cross Country Oil and Gas Limited, 20,000bpd and Waltersmith Refining and Petrochemical Company limited with capacity to produce 5,000bpd.

According to the DPR, the licensed refineries are at different stages of their projects.

For example, the fabricated process units of the 12,000bpd Amakpe International Refinery Incorporated have already been inspected and certified fit but have not been shipped to Nigeria.

Resource Petroleum and Petrochemicals International Incorporated has signed a contract with Foster Wheeler France and Axens for Front End Engineering Design (FEED) while detailed engineering approval has been granted to Hi Rev Oil Limited and Azikel Petroleum Limited to produce 50,000bpd and 12,000bpd of petroleum products respectively.

However, projects of about19 of the companies granted licences are yet to commence.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had said that the Federal Government is targeting 2019 to end fuel importation in the country.

“For the first time, I am putting so much strength in terms of what to do we do with our refineries, because that ultimately is the solution. I must make the refineries work so that the staff can justify their work.

“I am going around looking for investors to come in on a joint venture basis to put money into the refineries and make them work. I can authoritatively say to you that given the constraints that we face, the plan is that by December 2018 we should have reduced our importation of petroleum product by 60 per cent.

“This is because we would have brought enough money to get our refineries working to the tune of about 90 per cent,” the minister had said.

Stressing the need for government to show more seriousness toward achieving self-sufficiency in petroleum refining, a professor of technology management from Obafemi Awolowo University, Ile-Ife, Francis Ogbimi, told The Guardian yesterday that increased production is the solution to low supply, not the adoption of ideologies like capitalism deregulation,  privatisation, liberalisation or socialism and the like.

According to him, the mere adoption of deregulation and privatisation cannot build refineries and increase refining crude petroleum.

He stated: “The United States of America does not practise full deregulation; the American government controls the price of petrol. Africa’s problem is lack of industrialisation, not lack of deregulation and privatisation. The solution to Nigeria’s problems therefore, is industrialisation. An industrialised nation would necessarily be able to produce many scientific goods, including petroleum products. History and logic show clearly that the mere adoption of deregulation and privatisation of public assets or importation does not increase the supply of products in a nation.

“There is the wise saying: ‘Teach me how to fish, do not just give me fish to eat, so that I can catch fish any day that I want to eat fish.’ The Nigerian experience is a shameful one. Foreign nationals have been exploring and producing the oil and gas in Nigerian soils and waters since the 1950s with Nigerians standing as onlookers.

“The so-called deregulation and privatisation policies are based on importing petroleum products. No nation gets adequate supply of any product from mere importation. Did America become a world power by importing everything from Britain? Did Japan become the second biggest economy in the world by importing everything from Britain and America?

“In the short-run, Nigerian leaders and businessmen must change their minds from ‘getting rich overnight way of life,’ to seeing the need to build the nation to be called Nigeria. The needed change of mind must be done now, otherwise Nigeria will die soon.

“Nations become great by developing their people through education and training and acquiring increasing competences. Nigeria is an agricultural cum artisan nation with very low productivity. Nigeria is a very poor nation because its productivity is very low. The pool of knowledgeable, skilled and competent people involved in learning and production activities are the nation’s ever-appreciating assets (AAs) that do not experience economic meltdown.”