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Stakeholders list challenges of petroleum industry


NNPC GMD, Ibe Kachukwu

NNPC GMD, Ibe Kachukwu

LOW capacity utilization of refineries, proliferation of non-additive lubricants, underfunding of Joint Ventures (JVs) and poor pricing of products, have been identified by stakeholders as some major challenges confronting Nigeria’s oil and gas sector.

Specifically, they raised alarm over the importation of non-premium quality base oil, which are high in sulphur and ash content into the Nigeria’s lubricant market.

Speaking in Lagos on Tuesday, at the Nigerian Lubricants summit 2015, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu said the illicit trade in lubricant is thriving in Nigeria due partly to consumers’ attitude and lack of awareness.

He disclosed that the country’s lube industry consists of about 37 lube blending plants capable of blending about 80kmt yearly, adding that the capacity is expected to double in the nearest future.

Kachikwu explained: “There was a time, when we could produce most of our base oils locally. Kaduna Refinery had an installed combined production capacity of 677 mt per day of various base oils –blending to some major oil marketers siting lubricating oil blending plants in the hinterland for nearness to source of raw materials.

“Due to delay or lack of timely Turn Around Maintenance of the refinery, this is no longer the case as our base oils are currently imported 100 per cent with its attendant heavy toll on our external reserves, loss of jobs and increasing unemployment”.

With the growth in the country’s population, a Gross Domestic Product of $569 billion and the increase in vehicle demand in the country, Kachikwu believes there is hope for the lubricant industry.

The chairman of the summit, Chief Philip Asiodu, said in his address that current under funding of JVs of Nigerian National Petroleum Corporation (NNPC) and government’s attitude of persistently failing to meet its obligations are having negative effects on the replenishment of crude oil reserves.

Asiodu added that there is no valid excuse for the failure over the past two decades to agree on pricing which would have led to the much-needed development of gas reserves to fuel the power sector and gas-utilising fertiliser and petrochemical industries.

Lamenting that many promoters of excellent viable projects based on gas have negotiated with the NNPC and the government for more than 10 years to no avail, Asiodu: “It has been bad for the environment as cut-off dates for gas flaring have been postponed continuously. The consequences as regards overall enabling environment for investment and ease of doing business in Nigeria have been very negative.”

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