By Oscarline Onwuemenyi
ABUJA – The Group Managing Director of the Nigerian National Petroleum Development, Dr. Mohammed Sanusi Barkindo, has charged major players in the petroleum industry to consider investments in the refining of crude oil to meet with governmentâ€™s objective for full deregulation of the downstream sector.
Barkindo, who spoke in an address on Thursday during the maiden meeting of prospective investors in the proposed Lekki Greenfield Refinery, noted that when completed, it would be the first new refinery to be built in Nigeria in over 20 years.
He said preliminary market assessments suggest that there is room for only two new 200,000 to 300,000 barrels per day (bpd) refineries in Nigeria over the next seven years.
He added, â€œWith just one new refinery, we should be able to stem the flood of imports into the country, save an estimated national import bill in excess of $10 billion, and create the much needed employment for Nigerians.
â€œIt will also be the first refinery that would be integrated with an Industrial Hydrocarbon Park , which will be designed to convert natural gas and refined petroleum products into hydrocarbon derivatives.â€
The Greenfield Refinery to be located within the 16,000 hectare Lekki Free Trade Zone in Lagos, upon completion in the next four years, has an initial projected production capacity of 2,400 bpd and overall capacity of 3,600 bpd.
â€œFor us at the NNPC, these are historic times in our corporate development. As we sojourn on the path of corporate transformation, we eagerly await both the passage of the Petroleum Industry Bill (PIB) and the full deregulation of the downstream sector,â€ Barkindo added.
The NNPC GMD explained that the corporationâ€™s approach to capital investments â€œwill be based on an open, transparent process that will be intrinsically inclusive and will strive to partner with all bonafide investors who desire to contribute meaningfully to the development of the Nigerian oil industry.â€
He said NNPC would support the Lekki Free Zone by assisting with the arrangements for the supply of natural gas feedstock to the zone for the manufacture of petrochemicals, fertilizer and other much desired industrial products.
Barkindo acknowledged the separate and legitimate efforts that were being made by other industry players, particularly Oando Plc, towards the establishment of the refinery in Lagos , adding that partnership would serve the industry and the nation better than individual efforts.
He pointed out that to invest $5-6 billion in the downstream sector in Nigeria within a 4 year span on a sole risk basis is a daunting.
â€œSole risk investments are generally strange to the upstream sector and there is no better time than now for players in the downstream sector to emulate some of the successful investment strategies in the upstream sector by pulling their resources together to achieve bigger objectives and better results,â€ he said.
Barkindo further observed that the ultimate task before Nigeria after meeting its domestic needs would be â€œto reverse the product flows, create a respectable hub for the regional export trade, and engage the world of international product trading in an orderly and profitable manner to the greater benefit of Nigeria .â€
Also speaking at the meeting, the representative of the Technical Partners, OMEL, noted that a refinery project such as proposed Lekki Greenfield, was one of national importance adding that no serious investor would ignore such an opportunity.
He noted, however, that there was need for overt support and commitment from governments at all level.
The Permanent Secretary in the Lagos State Ministry of Commerce, Mr. Wale Raji, assured the investors of the commitment and support of the government, which he said has entered negotiations with Oando Plc and has allocated land at the Lekki FTZ.
Raji observed that Lagos state and the entire nation presents a huge market for the potential investors in the refining of crude, which should be a huge motivation for investment in the sector.
He said, â€œOn behalf of the Lagos State government, we are very much interested and prepared to work with investors who are committed to finding solutions to the problem of petroleum products supply in the country.â€