Published On: Wed, Mar 22nd, 2017

NIGERIA BEING PENNY-WISE, POUNDS-FOOLISH ON THE EXPORT OF CRUDE OIL AND NATURAL GAS

Share This
Tags

 

   

 

 March 20, 2017

President Muhammadu Buhari,

Office of the President of the

Federal Republic of Nigeria,

Aso Rock Villa,

Asokoro District,

Abuja.

 

Dear Sir,

It is appalling and a disturbing source of concern that Nigeria, despite its over fifty decades of oil and gas exploration and production activities, still exports its hugely produced crude oil and natural gas at commercial quantity, and then import ‘refined petroleum products’ at higher costs. The question is, who is losing in this business? Are we not ‘enriching other countries’ and shortchanging the country’s economic growth by still doing this kind of business all these years? Are we really making progress as a nation with this kind of business-focus on crude oil and natural gas export at a cheaper cost, then import the refined petroleum products and other ‘finished goods/products’ gotten from oil and gas productions, at higher costs? Can’t Nigeria refine our crude oil and natural gas and export the refined petroleum products and other finished goods/products to other nations in Africa and across the globe? Why can’t our refineries work at their maximum installed capacities while the Government/Organized Private sector build new refineries to make the country no longer import-dependent on finished petroleum products?

The crude oil and natural gas refining activities will not only generate tremendous employment opportunities that will keep the “restive youths” in the Niger Delta region preoccupied, it will also generate a lot of revenues for the country. It is sad that we still produce natural gas at commercial quantity and export same to our neighboring West African countries, for instance through the West African Gas Pipeline Project (WAGPP) which is about 421 Miles natural gas transportation Pipeline; from Utorogu Gas Plant in Delta State, Nigeria, to customers in the neighboring countries of Ghana, Togo, Benin Republic. And these countries use the gas imported from Nigeria to generate and stabilize their electricity/energy supply in places like Ghana and other countries. As a result of this, factories like Dunlop, Micheline etc., have relocated from Nigeria to these other African neighbors. These factories/companies relocate to other West African countries simply because of their assured security and stable electricity supply, amongst other factors. But in Nigeria, all we keep hearing are promises from the Government and their Institutions, which never see the light of the day.

It has become a cliché for successive Nigerian Ministers in the Petroleum industry to, every now and then, come forth to declare that Nigeria will stop fuel importation into the country by so and so period. But often times, these bold projections never see the light of day and as such, it has become a practice by these Government authorities in the industry to use in creating the impression that they are working. However, Nigerians will not continue to be fooled by such pronouncements, especially when they are never backed up with concrete steps over the set time period to bring them to reality. Perhaps, that is why many Nigerians and stakeholders in the industry were not moved when Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources, some weeks back disclosed at a public hearing on the review of petroleum pricing template for Premium Motor Spirit (PMS) organized by the House of Representatives, that Nigeria will stop importing refined petroleum products by 2019.

Let us recall that it was the same Dr. Ibe Kachikwu, when he was still the Group Managing Director of the NNPC, announced in late 2015 that a time frame of 18 months was set by the NNPC to end overseas refining of crude oil to boost local production capacity that will guarantee self-sufficiency. That time has long elapsed and we are still where we are. So, who are they trying to fool or deceive? All these ‘bold pronouncements’ are nothing but ‘book talks and rhetoric’ meant to deceive and make themselves ‘busy’ as government officials performing one role or the other. Former Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke made such statements many times while she was still in government. Now, it is the turn of Dr. Ibe Kachikwu to state ‘his own side of the story’ about fuel importation. And we are very certain that those coming after Kachikwu will do same, if the Federal Government and the NNPC do not do what is expected of them.

The above has been the same message to the Nigerian public by past Ministers of Petroleum Resources and the NNPC authorities, on the importation of fuel into the country. In the last two three decades, they have kept telling us that “fuel importation will soon end”, and Nigerians are now used to this slogan. But we have kept wondering when the said ‘end’ will come to sight and become a reality. It is even more disturbing and hopeless when we observe that both the Government and its subsidiaries in the industry have not done, neither are they doing what is expected of them to practically meet such laudable objective within a short period of time.

All they keep doing is to go in circles – like the usual Turn Around Maintenance (TAM) of our moribund refineries in the country that have become avenues for many to enrich their private pockets. So, no matter the explanation given by Dr. Ibe Kachikwu that the Federal Government initiated a model which attracted foreign investors to partner with the Nigeria National Petroleum Corporation (NNPC) to repair the country’s refineries within the two years’ period, the crux of the matter is that this will not be the first time we have seen the Government make such steps but at the end of the day, these refineries, which have become outdated, will go back to square one. Let us also not forget the fact that there are those in the industry who would continue to mount obstacles for the said refineries to work in full capacity because they prefer the importation of fuel which enriches their pockets. In other words, there are a whole lot of issues which they did not put into consideration before they usually come forth to make such pronouncements of stopping fuel importation.

Let us reiterate here that the importance of doing everything possible in ensuring that Nigeria is able to refine all of its crude oil and natural gas produce to satisfy both domestic demand and for exports, cannot be overemphasized. Aside the fact this will earn more revenue for Nigeria, it will also address all the ‘headaches’ created by ‘subsidy’ and ‘price fluctuation’ of crude oil in the international market, and will also make Nigeria less dependent on imported petroleum products. But to actualize this, it is imperative for the Federal Government and the NNPC to realize that ‘maintaining’ the four refineries in the country will not be enough to guarantee that Nigerians enjoy steady supply of petroleum products. In fact, even with the four refineries working at full capacity (which is most unlikely), satisfying domestic demands will still be a struggle, not to mention having petroleum products for exports.

We are aware that the Federal Government and the NNPC have plans to build new refineries, and we are also cognizant of the fact that Dangote is building one refinery, but before these plans will come to fruition and operational, it will take some time. Hence, the need to put measures in place to sustain a steady flow of supply of refined petroleum products.

And it is very simple to address this, as we have severally reiterated in different platforms – the Federal Government should, more importantly, instruct/compel the existing (Exploration and Production) International Oil Companies (IOCs), as well as Indigenous Oil and Gas Companies in the industry to refine at least, half (50%) of whatever crude oil or natural gas they produce. These IOCs and indigenous oil and gas companies should build/have refineries (plants) beside their production facilities, to refine natural gas and crude oil for domestic use in the country and for export purposes. Besides, they will also benefit immensely from the huge profit that will be abounded by such venture.

This will not only ensure the “transfer of technology” on the part of IOCs, it will also make IOCs to be more involved in refining petroleum products for domestic and export purposes in the country, other than being only in the extractive industry. All of this will bring about more industrialization and increased employment opportunities for the countless idle youths on our streets. We believe the IOCs need to be more involved in the growth process of Nigeria’s economy other than focus solely on exploration and production of crude oil and natural gas for export. Royal Dutch Shell, for instance, currently has the largest Gas-To-Liquids Plant in the world in Ras Laffan industrial city, which is about 80km North of Doha, Qatar. Apart from producing diesel, petrol, and kerosene the said Plant is also producing base oils for top-tier lubricants; a chemical feedstock called naphtha used to make plastics and normal paraffin, which is used to make detergents as well. Why can’t Shell and other IOCs equally establish such Plants in Nigeria? What stops them from doing so? Why can’t the Nigerian Government think and act towards these lines of action?

When half of the crude products they produce are refined in the country, and other chemical Plants built, the finished products will be more than enough for export purposes and to service domestic demands. And ultimately, Nigeria will become less – dependent on imported refined petroleum products and petro-chemical products in due time. Besides, it is about time we stop exporting crude oil and natural gas at a cheaper price and import the refined products at a higher cost. This is counter – productive to the nations’ economy.

Like we said above, the factories and Power Stations in our neighboring countries like Ghana, Togo and Benin Republic, use the natural gas imported from Nigeria through WAGPC to better the lot of their countries in the provision of steady power supply and industrialization. Without stable power, there cannot be industrialization and economic growth in any nation. We have more than enough natural gas reserves in Nigeria that can transform the nation’s fortunes, but sadly, all we have been doing is to flare the gas. With all of the above explained situation in Nigeria, would we not say that the country is being penny-wise, pounds-foolish? This should be food for thought for all, period!

 

Zik Gbemre, JP.

National Coordinator

Niger Delta Peace Coalition (NDPC)

No.28, Opi Street, Ugboroke Layout, Effurun-Warri,

P.O. Box 2254, Warri, Delta State, Nigeria.

Tel:       +2348026428271

+2348052106013

Website: www.ndpc-zik.org

 

We Mobilize Others to Fight for Individual Causes as if Those Were Our Causes

 

About the Author

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Advertisement