The Nigerian National Petroleum Corporation, NNPC, Thursday, said it has concluded plans to rehabilitate and build new plants, as all the four refineries are currently down, thus forcing the government to import petroleum products from the global market.
The Group Managing Director, NNPC, Mallam Mele Kyari, made the disclosure at the just-concluded Seplat Energy Summit 2020, which had “Business Sustainability and Strategic Leadership in Africa” as its theme.
He said: “Today, unfortunately, all our four refineries are down. We are importing every petroleum product that we consume in this country.
‘’We are working to make sure that we are able to fix our refineries and also have new initiatives, like having the condensate refinery, which I am also happy to announce that the Seplat group is cooperating with NNPC to create a splitter plant in short term.
“There are other private initiatives. As we know, there are several licenses granted by the Federal Government for people to construct refineries, but they can’t do this because of the clear issue around the market structure.
‘’But thankfully, we have transited out of the regulated petroleum market into a deregulated market, which means that companies can now predict what will be the refinery price of petroleum and they can now have the basis of investment; banks can see visibility around the recovery of cost and margin and ultimately we will see more activities coming up.
“As we know, Nigeria as the net importer of petroleum products; that simply means that with all the resources that we have, we still import petroleum products. Beyond that, it is a continent that is projected to have a significant increase in consumption of petroleum in the coming years even up till 2040.
“The projections about 2.3MB/d by 2040 are still a very conservative estimate. We have one of the most active population, growth rate and projections showing that by 2049 we would likely be the most populous continent in the world.
‘’This means Africa is a continent of opportunity, and Nigeria will contribute about 25% of the total population of Africa by 2040; and in terms of growth, it will constitute about 20%. We are in a country with vast opportunities where you cannot exclude petroleum and its related resources.
‘’What we can do to get this to work for us is first, make the operating environment competitive – this is one of the targets so far of the Minister and the government of today, first to bring down the cost of production and then pay attention to gas.”
Speaking earlier, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said investment in oil and gas would continue to drop globally because of the negative impact of the Coronavirus pandemic on the industry.
He said: “The COVID-19 pandemic has indeed taken on the global Oil and Gas industry with cascading impact to other sectors. It is not only a health crisis; it is both an economic and security threat to nations, especially when revenues from Oil and Gas sources cannot fund government budgets.
“However, it is not a death sentence but an opportunity to see things from different perspectives and act differently. The global world economy is forecasted to decline by about 3.4 % in 2020 due to the impact of the pandemic compared to 2.9 % growth globally in 2019.
“From OPEC analysis, Global average oil demand decline about 8.49 million barrels per day and Oil prices went down as low as 10 dollars per barrel in April 2020 due to the economic impact of COVID-19.
“Also there was the fall out between Saudi Arabia and Russia on the agreed volume of crude oil supply to energy market, which led to a global supply leading to crude oil supply and demand imbalances, thus leading to a drastic drop in oil prices.”
Similarly, the new Chief Executive Officer of Seplat, Mr. Roger Brown, said the government should support oil firms through partnerships in Joint Venture Agreement, early approvals and legislation.
However, Executive Secretary, Nigerian Content Development Monitoring Board, Engr. Simbi Wabote, who harped local content and balance energy development, said: “With the right policies across nations, our young population will be the driving forces to achieving our energy transition journey.”