Experts in the oil and gas sector on Thursday in Lagos urged the Federal Government to engage banks in financing the building of modular refineries in the country.
They made the plea at a panel session of the conference of Association of Energy Correspondents of Nigeria (NAEC) in Lagos entitled: “Optimising Local Refining Capacity in Nigeria: Opportunities and Challenges”.
In his remarks, Retired Capt. Emmanuel Iheanacho, the Chairman, Integrated Oil and Gas Ltd., said that in the last 10 years, the demand for refined products had always been on the increase.
Iheanacho said that building a modular refinery of about 1,000 barrel cost over 1.2 billion dollars.
“Building a modular refinery is not easy, apart from citing your refinery beside the sea, one can as well cite it near a marginal oil field.
“Finance is the major reasons why most investors in the modular refineries abandoned it.
“No bank is ready to give loan to any investors in modular refineries that is why it is just only two out of 40 investors giving licences that were able to build it.
“Government should engage the banks to provide the finance needed for building modular refineries,” he said.
In his comments, Mr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry, urged the Federal Government to review its policy on refined products to encourage investors into the sector.
Yusuf said, “It is pitiful that after many years of oil discovery, the country is still importing its refined products for consumption.
“As long as we have oil and gas sector link with the government, private investors will continue to evade the sector.”
The chamber director-general also urged the government to overhaul the sector to encourage private investors.
Also, Mr Olumide Adeleke, the Deputy Director, Head, Engineering and Standards Division, Department of Petroleum Resources (DPR), said it was obvious that finance was the problem of building modular refineries.
Adeleke, however, said that the department would revoke the licence of any investors who could not build the refinery within the stipulated period.
Commenting, Dr Saka Matemilola, the Chairman, Nigerian Council of Society of Petroleum Engineers, urged NNPC to repair the existing refineries to improve its production.
Matemilola also urged DPR not to revoke the licences of investors who were unable to build modular refineries.
According to him, withdrawing the licences will not solve the problems facing the sector.
He said that there was need to work with the licence owners to address the issue of sourcing for finance from the banks to build the refineries.