Kachikwu, others seek sale of refineries to local, foreign investors
The minister and other experts, drawn from his ministry as well as those of the Ministries of Budget and National Planning, the Department of Petroleum Resources (DPR), Nigerian National Petroleum Corporation (NNPC), Petroleum Products Pricing Regulatory Agency (PPPRA) and Infrastructure Concession Regulatory Commission (ICRC), insisted that there was an urgent need for an infrastructure re-birth programme for the oil and gas sector.
In a communiqué issued after a two-day workshop to review upstream, mid-stream and downstream critical oil and gas installations nationwide, the stakeholders decried Nigeria’s low refining capacity utilisation.
The recommendation comes in the wake of last week’s report of the United Nations Conference on Trade and Development (UNCTAD) that confirmed the nation’s downstream oil sector’s woeful performance in the last 20 years, especially refining utilisation where it noted that the utilisation rate of the refineries fell from 34.5 per cent in 1998 to 18.3 per cent in 2017.
While this was not the first time that stakeholders were raising concerns over the state of the facilities and even suggesting way out, the President Muhammadu Buhari administration had however failed to act on his campaign promises to overhaul the assets and operate them optimally.
While seeking the nod of Nigerians in 2015, the All Progressives Congress (APC) had promised to untangle the NNPC and end fuel importation by addressing the challenges facing the nation’s dilapidated refineries.
Even as importation of petrol continues four years into the life of the administration, the refineries have kept sustained their dismal outing, leading to perennial losses in the region of N551.46 billion from January 2015 to December 2018.
Kachikwu, who was represented at the workshop by his Senior Technical Adviser on Refineries, Gas, Downstream and Infrastructure, Rabiu Suleiman, equally recommended new negotiations in such a way that domestic refining obligations would be adequately captured for new entrants.
To address pipeline vandalism, the stakeholders canvassed for deployment of drone surveillance, engagement of host communities and signing of service level agreements between employers and employees.
On inadequate inland storage facilities, they urged government to engage third parties to invest through adequate sensitisation and framework for the development of strategic reserves of products
The workshop also called for enforcement of associated gas frameworks to ensure compliance with the agenda of gas-based economy.
On cooking gas, the group said penetration should be from domestic investors while tariff waivers should be given to potential investors in the Liquefied petroleum gas (LPG) sector.