The Nation Newspaper

Tag: refineries

  • ‘Why refineries‘re not attracting investment’

    ‘Why refineries‘re not attracting investment’

    A cap on the price of petroleum products is the major reason the downstream oil sector, especially domestic refining, has remained undeveloped, Head Energy Research, Eko Bank Limited, Dalapo Oni, has said.

    In an interview, he said once the government fully deregulates the sector, private refineries would sell at market-determined prices to make profit.

    According to him, refineries would continue to face financial challenges as demand exited, adding that banks were willing to finance the sector when there were credible financing opportunities.

    He however noted there had been a change in government’s approach to pricing.

    “There are prospects in the oil and gas sector, nevertheless. It depended on how government approached the issues, pricing and the structure that are required,” he said.

    He said one key factor that affected oil and gas investment in Nigeria was lack of trust.

    According to him, a lot of investors do not trust that the government will keep to its policy statement.

    He berated the House of Representatives for trying to amend the Act of the Nigeria Liquefied and Natural Gas (NLNG), which he described as the best Joint Venture (JV) model in the country.

    He said the government should keep to its agreements.

     

  • ‘Why refineries can’t produce optimally’

    ‘Why refineries can’t produce optimally’

    Managing Director Kaduna Refining and Petrochemical Company (KRPC), Alhaji Idi Mukhtar has attributed the inability of refineries to produce optimally to pipeline vandalism.

    He spoke at the fourth edition of capacity building workshop for Energy Correspondents organised by the KRPC.

    Mukhtar advocated for framework that would regard the pipeline as military zone in view of its strategic importance.

    He stated: “A major challenge facing KRPC is the incessant vandalism on Warri–Kaduna pipeline and in fact it is one of the greatest threats to KRPC’s performance.

    “This line needs to be highly secured to guarantee continuous supply of crude oil to KRPC.”

    He called for establishment of 20-inch pipeline to optimise refining of crude to about 80 per cent.

    Mukhtar said: ‘’Of equally strategic importance is the need to lay a new wider (20 inch) pipeline that will serve as a better alternative to the current 16 inch pipeline which is limited by its size and low integrity.

    ‘’In fact, if KRPC is to achieve the target of operating at a minimum of 80 per cent throughput, the new pipeline is needed to ensure delivery of sufficient crude oil to meet the target.’’

    He said the company is undertaking major restructuring process for the formation of Autonomous Business Units (ABU) with new Operation and Marketing Model (O&M Model) to address inefficiencies in the refinery.

    Chairman of Kaduna Council of the Nigeria Union of Journalists (NUJ) Muhammad Garba appealed to media practitioners to embark on investigative efforts on pipelines vandalism with a view to exposing sponsors of the economic saboteurs.

  • Group lauds IPMAN’s plan to build new refineries

     

     

    The South East Renaissance Group has commended the plan by members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) to build new refineries, describing it as a visionary step towards ending the perennial scarcity of petroleum products in the country.

    President of the group and former Commissioner for Information and Strategy in Imo State, Nze Elvis Agukwe, assured that the new leadership of IPMAN under Chief Lawson Obasi will surely stabilize the distribution of products and end scarcity.

    Agukwe who regretted that endless crisis prevented IPMAN from playing its expected role, expressed confidence that the new leadership under Chief Obasi will take charge of the situation.

    According to him, “with Chief Lawson Obasi as the new IPMAN President, the much needed stability in the downstream sector is now here and Nigerians will no longer groan under any form of fuel scarcity”.

    He also expressed optimism that the plan by IPMAN to build refineries will go a long way to stop the import of the products, thereby saving the nation the much needed foreign exchange.

    “This is a master-stroke of walking the talk. I am not surprised at all because Chief Lawson Obasi is not only a key player in that sector but he commands the respect of his members. His presidency of IPMAN will surely benefit the nation”, Agukwe said.

    He further urged the Federal Government, especially the Ministry of Petroleum Resources and NNPC, to work in concert with IPMAN to realize its dreams for Nigeria.

    “The Petroleum Ministry and NNPC should pay more attention to the needs of IPMAN rather than the undue favour it grants the oil majors, many of whom are not Nigerians,” he stated.

    The former commissioner noted that IPMAN was employing millions of Nigerians and contributing to the growth of the economy and hence should be supported through favourable government’s policies.

    Agukwe described the new IPMAN President, Chief Lawson Obasi as a man of ideas with proven leadership qualities who will assist the government achieve its goals to stabilize the oil sector.

    “For us as the South East Renaissance Group, the emergence of Chief Lawson Obasi as IPMAN President could not have come at a better time. With him in the saddle, the era of long queues in petrol stations will be over. We congratulate him and wish IPMAN well for this wise choice,” he submitted.

  • Reps scuttle NNPC’s $400m refineries loans bid

    Reps scuttle NNPC’s $400m refineries loans bid

    •Refineries ‘lost N82b’

    The House of Representatives Committee on Privatisation and Commercialisation  yesterday stopped the bid by the Nigerian National Petroleum Corporation NNPC to acquire a $400 million loan for the upgrade of the four refineries in the country.

    The Hon. Ahmed Yerima- headed committee said the NNPC  was breaching Section 11 (g) of the Public enterprises ( Privatisation and Commercialisation) Act 1999, which gives the National Council on Privatisation (NPC) the power to do such.

    Members of the committee said the NNPC shoukd suspend outrightly the proposed restructuring/privatisation of the refineries because of the breach of the regulations in the Bureau of Public Enterprises (BPE) as well as the Presidency’s delay in inaugurating the National Council on Privatisation (NCP).

    The committee said it will formally communicate President Muhammadu Buhari on the need to adhere to due process and avoid the pitfalls in the commercialisation and privatisation exercises that were made in the past.

    The committee noted that breach of policy guidelines and extant regulatory framework and undue rivalry among government agencies is giving investors concern.

    According to NNPC document submitted to the Committee and obtained in Abuja, “in 2015, the refineries posted combined losses of N82 billion and processed only eight million barrels of crude in total.”

    At the meeting yesterday, the failure of the NNPC management to present documents showing the approval allegedly given by the President for the proposed improvement of the refineries’ capacity utilisation to 80 per cent within one year on the basis of the subsisting ownership structure, made members of the committee angry.

    Also the $50 million agreement signed by NNPC with a Chinese company, without any clear work plan got the disapproval of the lawmakers.

    Group Executive Director (Refineries) Anibor Kragah, who spoke for the NNPC, said the report on the privatisation of the refineries, was not true.

  • How to make refineries efficient, by expert

    Steady access to crude oil will enhance refineries’ efficiency,  Enfrasco Energy and Infrastructure Services Limited Chairman/Chief Executive Officer Chukwuma Okolo has  said.

    He also said autonomy in the management of refineries, such that their Managing Directors (MDs) could take decisions without elaborate applications to the Nigerian National Petroleum Corporation (NNPC) or the Presidency for approval should be ensured.

    In an interview in Lagos, the oil and gas expert said Nigeria did not need to privatise its refineries to make them work.

    According to him, determination and political will are all that is required to drive the refineries in Port Harcourt, Kaduna and Warri.

    Okolo noted the refineries by international standard were not old, adding that refinery maintenance and operation have simple processes.

    He said those running the refineries are among the best in the world, adding that if privatised, it will is still be these same Nigerians who are running it today that will run them. He said commitment was important.

    “Our refineries by global standard are extremely good, they are not old, there are refineries built in the sixties, most of our refineries were built in the 80s and 90s-there’s the “old old” Port Harcourt refinery, which was the first one ever to be built, then there was the Port Harcourt (second refinery), there is the Warri refinery which is actually three plants in one, we call it Warri Refinery and Petrochemical Company which is a refinery, a petrochemical plant as well as a carbon black plant, there is Kaduna refinery which is actually a dual crude finery,” he said.

    He said the Kaduna refinery could handle both Nigerian crude and imported Venezuelan heavy crude, adding the “design was that when we need to run it so that we can produce bitumen for road construction, they run the heavy crude and have the byproducts of running heavy crude after kerosene, petrol and diesel”.

    According to him, the Kaduna refinery was designed as dual crude plant to refine Nigeria light crude or more of the Venezuelan heavy crude depending on the product yield desired.

  • Why private refineries have not rolled out

    Private refineries have not started operation 14 years after they were licensed because of lack of funds, it has been learnt.

    Financial institutions, it was gathered,  are not interested in giving long-term funds to operators in the oil and gas industry.

    It is believed that the refineries’ inability to roll out has further worsened the country’s fuel problem.

    The Chief Executive Officer, Jehata Nigeria Limited (owners of Abuja Power Station), Mr. Jameel Jammah, said technical deficiencies and huge capital outlay were  some of the problems facing owners of private and public refineries globally.

    He said private investors were  worse hit, because they do not have the money required to set up refineries. Jameel said dearth of skills and capital are some of the problems besetting the growth of private refineries.

    He said: “This explains why it is difficult for the 18 privately-owned refineries licensed by the Federal Government to take  off, 14 years after they were approved. Accessibility to credit facility is poor in Nigeria, coupled with lack of required manpower. When banks refuse to lend to firms that won the bids for the establishment, there is nothing they could do.

    “The demands from the banks, with which one wants to fund the projects, are outrageous. For instance, in a situation whereby banks requested that people should repay the loans within five years, as against a period of say 10 to 15 years, there is a problem. Where would the banks want people to get the money to pay back the loans, which they were given to finance the building of the refineries within such a short period?’’he asked.

    According to him, refineries’ operation is in stages, noting that the existing and prospective owners of refineries globally pass through the stages. Jammel listed the stages to include getting and clearing the site for the project, carrying out an Environmental Impact Assessment (EIA) programme on the project, knowing the  capacity or output of the refineries, profit projection in the next five years  and others.

    “I  can frankly tell you that many banks refused to lend money to us, when we conceived and started the building of our modular refinery in Abuja. The problem is the same all over the world. Nobody is ready to commit funds to a project that one is not sure of its immediate returns,’’he said.

    Also, the former President, International Association of Energy Economists (AIEE), Prof Adeola Akinnisiju, said a lot come into play when the issue of owning a refinery (whether traditional or modular)   crops up.

  • Why private refineries have not rolled out

    Private refineries have not started operation 14 years after they were licensed because of lack of funds, it has been learnt.

    Financial institutions, it was learnt,  are not interested in giving long-term funds to operators in the oil and gas industry.

    It is believed that the refineries’ inability to roll out has further worsened the country’s fuel problem.

    The Chief Executive Officer, Jehata Nigeria Limited (owners of Abuja Power Station), Mr. Jameel Jammah, said technical deficiencies and huge capital outlay were  some of the problems facing owners of private and public refineries globally.

    He said private investors were  worse hit, because they do not have the money required to set up refineries. Jameel said dearth of skills and capital are some of the problems besetting the growth of private refineries.

    He said: “This explains why it is difficult for the 18 privately-owned refineries licensed by the Federal Government to take  off, 14 years after they were approved. Accessibility to credit facility is poor in Nigeria, coupled with lack of required manpower. When banks refuse to lend to firms that won the bids for the establishment, there is nothing they could do.

    “The demands from the banks, which one wants to fund the projects, are outrageous. For instance, in a situation whereby banks requested that people should repay the loans within five years, as against a period of say 10 to 15 years, there is a problem. Where did the banks want people to get the money to pay back the loans, which they were given to finance the building of the refineries within such a short period?’’.

    According to him, refineries’ operation is in stages, noting that the existing and prospective owners of refineries globally pass though the stages. Jammel listed the stages to include getting and clearing the site for the project, carrying out an Environmental Impact Assessment (EIA) programme on the project, knowing the  capacity or output of the refineries, profit projection, let say in the next five years,  and others.

    “I  can frankly tell you that many banks refused to lend money to us, when we conceived and started the building of our modular refinery in Abuja. The problem is the same all over the world. Nobody is ready to commit funds to a project that one is not sure of its immediate returns,’’he said.

    Also, the former President, International Association of Energy Economists (AIEE), Prof Adeola Akinnisiju, said a lot of things come into play when the issue of owning a refinery (whether traditional or modular) crops up.

  • France: Strike hits all eight oil refineries

    A strike over new labour laws has spread to all of France’s eight oil refineries, the CGT union says, in an escalating dispute with the government.

    An estimated 20% of petrol stations have either run dry or are low on supplies.

    Clashes broke out at one refinery early yesterday when police broke up a picket at Fos-sur-Mer in Marseille.

    Prime Minister Manuel Valls insisted the labour laws would stand, and that further pickets would be broken up.

    “That’s enough. It’s unbearable to see this sort of thing,” he told French radio. “The CGT will come up against an extremely firm response from the government. We’ll carry on clearing sites blocked by this organisation.”

    The strike has gradually spread across France’s fuel infrastructure, hitting oil refineries, fuel depots and petrol stations across the country.

    The government said two out of every 10 petrol stations were affected, but motorists uploaded details of many more that had problems with supplies.ave been providing updates on petrol shortages across the country

    Police moved in early at dawn on Tuesday to dismantle a blockade outside the Fos-sur-Mer oil refinery and petrol depot at Marseille port.

    Tear gas and water cannon were fired, projectiles thrown, and tyres and pallets set alight, reports said. Several people were hurt on both sides.

    In his first intervention in the dispute, President Francois Hollande denounced the blockade as a “strategy supported by a minority”.

    Multinational Total, which owns five of France’s oil refineries, threatened to review its investments in response to the disruption.

    “If our colleagues want to take an industrial asset hostage for a cause that is foreign to the company, you have to ask whether that is where we should invest,” Chief Executive Patrick Pouyanne told reporters.

    He cited a planned €500m modernisation plan at Donges, near the western port of Saint-Nazaire, where some of the biggest disruption took place yesterday.

    “I’m not saying we won’t go ahead with it, just that we must learn the lessons of what’s happening and review these plans.”

    The union is aiming to cut output by half at the refineries and wants strikes on the railways as well, in an attempt to reverse labour laws that make it easier for companies to hire and fire staff.

    There are concerns that the disruption may affect the Euro 2016 football championships, with one former union leader saying the event is not “sacred”.

    The government provoked union outrage when it resorted to a constitutional device to force its watered-down labour reforms through parliament without a vote, earlier this month.

  • Hands off refineries, ex-Kogi Acting gov tells FG

    FORMER Acting Governor of Kogi State and member of the All Progressives Congress (APC) Board of Trustees (BoT), Chief Clarence Olafemi, has called on the Federal Government to liberalize crude oil refining in Nigeria.

    This, he said, would encourage more private participation in crude oil refining in Nigeria. He called on the Federal Government to withdraw from managing the refineries to completely eliminate corruption in the sector. Speaking on the raging controversy trailing last Wednesday’s increase in pump price of fuel from N86.50 to N145 per litre, he called on the authorities to find a balance between reining in the excesses of the private players in the industry and complete deregulation.

    He added: “The best option is to create massive private participation in local refining of crude oil by liberalising licensing. “The government has no business running a refinery. Otherwise we will only be transferring corruption from importation to maintenance/running cost.

    “For example, if the government is directly invovled in cement manufacturing, we would not by now be where we are as a nation in being self sufficient in the product and conserving the huge foreign currency for importation of finished cement products. “Nigeria should quickly and hurriedly remove all obstacles on guidelines for owning a private plant and guaranteeing regular sales of crude to them at international market rate, and you will have a stable and competitive situation in the selling price.

    “Mr. President can safe Nigeria from this perennial problem by focusing in this direction. “I want to believe some serious impediments still exist that is not attracting both local and international investors from jumping at the offer.

  • Should Fed. Govt. hands off refineries?

    SIR: I read the views expressed by a former acting Governor of Kogi State, Chief Clarence Olafemi, in The Nation of May 16, to the effect that “government should hands off refineries if it was intent on eliminating corruption in the sector.”

    I disagree with his view. There are many misconceptions about a lot of issues in Nigeria. One of which is that the Federal Government need not be in charge of directing the economic affairs of the nation. Government, they say has no business in business.

    We have forgotten very quickly how the government of President Roosevelt averted the recession of 1923, 1929-1933 caused by the American private sector. That recession almost plunged the world economy into a catastrophe. Roosevelt’s “new deal” economic programme helped staved it off.

    Presidents George Bush and Barack Obama’s economic policies which entailed spending public money to prop up the economy cushioned the effect of the 2008 world recession caused by banks executives who gave out loans to people who couldn’t pay off their debt. General Motors and many other private companies got a leeway and jobs were protected. Governments worldwide did the same thus averting economic disaster.

    Ninety-nine percent of the refineries in OPEC member countries are run by the public sector while two of the most successful airlines in the world “Emirate” and “Etihad” are run by their various governments.

    The privatisation of the power sector in Nigeria has shown clearly that it isn’t as though that government can’t run establishment but the fact that whether private or public, workers fall prey to the systemic rot in the country.

    Of what positive effects have the privatisation programmes of Presidents Olusegun Obasanjo and Goodluck Jonathan from 1999- 2007 and afterwards been to Nigerians?

    The problem with Nigeria is the lack of visionary leadership which is important in the development of a nation. No matter the potential wealth of a country, if the leaders aren’t visionaries, the country would never develop. The Book of Proverbs 29:2 captures it succinctly, “when a good man rules the people rejoice but when a bad man rules they groan with agony.”

    There is no country in the world that can survive without its government. Could we please put things in proper perspective?

     

    • Essien Idiong,

    Port Harcourt, Rivers State.