- ‘Govt Working for Fuel Self-sufficiency, Export’
Nigeria requires a mixture of bigger and modular refineries to achieve self-sufficiency in crude oil processing, to become an exporter of petroleum products in Africa, Deputy Director, Department of Petroleum Resources (DPR), Olumide Adeleke, has said.
According to him, the four state-owned refineries – Port Harcourt 1 &2, Warri and Kaduna refineries are operating below installed capacities of 445,000 barrels per day (bpd), adding that it was a setback to the country’s goal of providing fuel for domestic market aside making fuel available for export.
At an industry’s forum in Lagos, Adeleke said when Dangote Petrochemical and Refinery starts production in 2019, the country would be at an advantage to distribute enough fuel in the country, and export the product to other countries.
He said Dangote Refinery and other refineries are bigger platforms needed to refine crude oil, noting that the bigger a platform is, the higher the profit margin that accrues to the owner of the platform.
The decision by the Federal Government to license operators that wish to invest in modular refineries few years ago, was part of efforts to encourage processing of crude oil in the country, he said.
He, however, said the DPR, which issued the licences on behalf of the government, was not happy that the many of the operators are yet to begin processing of crude oil.
Adeleke said: “While the government is making crude oil refining for domestic consumption by encouraging as many firms as possible to go into it, it is worthy of note that many of the firms that were licensed are yet to show meaningful progress in that regard. To achieve self-sufficiency in the area of crude oil refining locally, private operators need to be up and doing by processing crude oil optimally.”
According him, finance is a major setback to operators, who want to invest in refineries, adding that many operators are finding it difficult to get a minimum of $2billion required to operate a big refinery.
This, Adeleke said, informed the decision of the government to arrange some finances for operators.
On issue of co-location, Adeleke said col-location is good, when firms established for that purpose are situated where refineries are. He said co-location that is going on in Port Harcourt was as a result of the refinery in that region. In Port Harcourt alone, co-location of about 100,000 barrels of crude oil is ongoing, a development, which is good for the country.
