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FG Studies Four Private Refineries

Posted by BY ABRAHAM OGBODO on 2004/08/22 | Views: 2535 |

FG Studies Four Private Refineries


TWENTY-FIVE companies have applied for licences to build private refineries in Nigeria. This is in response to the liberalisation policy of the Federal Government as it affects the sector.

TWENTY-FIVE companies have applied for licences to build private refineries in Nigeria. This is in response to the liberalisation policy of the Federal Government as it affects the sector.

However, of the 25, only four "have come forward with plans to start construction" while "a fifth is undergoing approval process," according to the Presidential Special Adviser on Petroleum Matters, Dr. Edmund Daukoru.

The former managing director of the Nigerian National Petroleum Corporation, (NNPC), told The Guardian in an exclusive interview that time had run out for those "who only got the licences and went to sleep."

Daukoru, who is in Norway to attend the North Sea Oil Conference in view of Nigeria's increasing involvement in offshore operations, raised hopes of lower pump prices if the refineries became fully functional.

Indeed, he said that as much as N6 could be secured on a litre of petrol from landing cost.

"We made some calculations and we came up with a conservative estimate of about N6, which will be prudentially saved on landed costs if we actually refined at home," he said.

But he maintained that such gains would largely "depend on internal efficiency."

Still, the adviser disclosed that functional refineries might not spell an end to petroleum importation in the country as the combined production capacities of all four refineries could only meet 70 per cent of domestic fuel consumption.

"Even if all the refineries are working, we will produce only about 70 per cent of the products and so we are going to be saving about 70 per cent of N6 or something like that," he said.

And as international price of crude tore through the roofs last week, setting at an all-time high of 49.50 dollars per barrel, Daukoru said that the Organisation of Petroleum Exporting Countries, OPEC would avoid pushing the United States, world number one consumer of oil, to the limits.

According to him: "They (Americans) don't want to spend huge amount of money to develop alternative, if oil is available at a lower price and OPEC does not want to push reluctant people to start to invest in alternatives because of excessively high prices. This is the point I call the meeting point of both producers and consumers."

Specifically, Daukoru said to counter the effects of frequent instability in world oil market, Nigeria must discourage its often oil-related crises.

He implored all committed interests in the oil sector to show understanding so that government's plan to make the sector more efficient through the ongoing privatisation programme is not stalled

He specifically appealed to oil workers comprising the National Union of Petroleum and National Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to exercise restraint in their engagement with government.

Both labour unions had in late June served notice of a strike action, accusing the Federal Government of insincerity and lack of transparency in the ongoing Turn Around Maintenance (TAM) of the four refineries.

Daukoru, however, maintained that the workers were not fully free from blame over the delay in fixing the refineries.

His words: "They are part of the oil workers. Government can make the money available but the people who actually carry spanners and fit the bolts and nuts are themselves.

"And in any form of upgrade or refurbishment, even though a large parcel of the work may be contracted out, there are always parcels that are done in-house by our own hands. They must therefore bear responsibility for the delay of such aspects."

Amid labour and civil society opposition to the current deregulated pump price regime, the special adviser said a committee report just submitted to the presidency, has recommended further sector reforms.

He disclosed that a restructuring that would critically change the NNPC and all its subsidiaries was in the works.

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