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Refineries Get N162bn Crude Oil in Eight Months

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  • Refineries Get N162bn Crude Oil in Eight Months

Three of the four refineries in Nigeria have continued to receive high volumes of crude oil valued at billions of naira every month since the beginning of this year, despite their abysmal performance either individually or collectively.

Findings on Friday showed that although the three facilities got no crude delivery in the fourth quarter of 2015, they started receiving high quantity of crude oil in January 2016.

The refineries are the Kaduna Refining and Petrochemical Company in Kaduna State; Port Harcourt Refining Company in Rivers State; and Warri Refining and Petrochemical Company in Delta State.

The latest financial and operations report of the Nigerian National Petroleum Corporation for September 2016, which was obtained by our correspondent in Abuja on Friday, showed that between January and August, the country’s refineries received a total crude volume of 16.468 million barrels valued at N162.6bn.

Despite receiving such huge volumes of crude during the period, the facilities still performed below standard as the corporation admitted that the refineries’ combined performance was abysmal.

Analysis showed that the largest crude delivery in volumes to the refineries during the eight-month review period was done in August 2016, as the facilities got 3.282 million barrels of crude oil valued at N48.901bn.

On the other hand, the lowest crude delivery to the facilities was done in January 2016, as the combined crude oil receipt for that month was 502,450 barrels worth N2.726bn.

In one of its comments on the performance of the refineries, the NNPC said, “For the month of September 2016, the three refineries produced 139,724 metric tonnes of finished petroleum products and 74,885MT of intermediate products out of 252,897MT of crude processed at a combined capacity utilisation of 13.89, compared to 19.09 per cent combined capacity utilisation achieved in the month of August 2016.

“The abysmal performance was due to crude pipeline vandalism in the Niger Delta region and the three refineries continue to operate at minimal capacity.”

Industry stakeholders, observers and experts on several occasions had called for the privatisation, concession or outright sale of the Nigeria’s refineries.

Last week, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, raised the alarm that the refineries could end up as scrap in 2019 once the Africa’s richest man, Alhaji Aliko Dangote, began processing crude oil at his refinery in Lagos.

Kachikwu, who spoke at the stakeholders’ consultative forum in Abuja, said, “Refineries will have to work; it is really not an option anymore. And not only should it work, it has to work very quickly. The reality is that if we do not privatise and we do not support concession, which is not what we are doing, then we have a responsibility to find private capital to get them to where they should be.

“This is because if we do not get them to work, in 2019, I can assure you that if Dangote system works well, we would have scrap; we won’t have refineries because by then, it would be too late to do anything.”

Stakeholders in the oil and gas sector had stated in the draft National Oil Policy 2016 that the refining capacity of Nigeria’s refineries was one of the smallest in the world, putting it at about 14 per cent against a global average capacity utilisation of 90 per cent.

In the draft document, which was obtained by our correspondent from the Ministry of Petroleum Resources, the stakeholders said, “The midstream consists of three refineries, petroleum product storage depots, onshore oil and gas pipelines, and four terminals (all government-owned subsidiaries of the NNPC).

“Despite being one of the leading crude oil producing nations in the world, Nigeria’s refining capacity is one of the smallest. The capacity utilisation has fallen to just 14 per cent in 2014, against a global average capacity utilisation of 90 per cent. A strong commercially viable and significant refining sector is an essential part of the Nigerian Petroleum Policy.”

They noted that on a per capita basis, Nigerian refining capacity (theoretical maximum capacity, which was far higher than actual current operational capacity) was one of the lowest, even among other African countries.

Outlining the per capita performances of some refineries in Africa, the stakeholders stated that Libya had 6.17 barrels per day/capita; Algeria, 1.37 bpsd/capita; South Africa, 1.11 bpsd/capita; Egypt, 0.96 bpsd/capita; and Nigeria, 0.3 bpsd/capita.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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