FG ‘ll adopt PPP model to unlock investment in Midstream, Downstream Oil and Gas sector- Sen. Lokpobiri

Ugo Amadi

As part of effort to boost refining capacity of the nation the federal government has reiterated its commitment to adopt  the Public-Private Partnerships (PPPs) model to unlock investment in the Midstream and Downstream segments of the Oil and Gas sector which would lead to establishment of more modular and mega refineries.

The Hon. Minister of State for Petroleum Resources (Oil) , Sen. Dr. Heineken Lokpobiri stated this while delivering a special address on the topic ‘Policy Directions and Strategic Initiatives for Refinery Development in Nigeria’ at  the Inaugural Crude Oil Refinery Owners Association Of Nigeria (CORAN)  Summit held at Eko Hotels & Suites, Lagos.

The theme for this year’s Summit “Making Nigeria a Net Exporter of Petroleum Products” ,stressing that the theme is apt and highly critical at this umpteen time for all stakeholders.

Represented by, Engr Kamoru Busari ,Director Upstream Ministry of Petroleum Resources, the minister stressed that the Federal Government  is open to equity investment in modular refinery and other upcoming refinery plants as a step to ensure energy security.

Also, he noted that the government is encouraging  investors to build greenfield refineries by providing an enabling business environment. ‘’ A recent approval was granted to invite to Nigeria a consortium of investors from South Korea that intends to establish four 100,000bpd refineries in Nigeria in four (4) different locations.

On policy direction, he said that the upstream regulator, NUPRC have developed and published the Domestic Crude Supply Obligation (DCSO) guidelines to enshrine transparency in the oil industry and ensure access to feedstocks by our local refiners.’’ In addition, we will prioritize and work with stakeholders to ensure effective implementation of the recommendation of the modular refinery committee to give special considerations/concession to local refineries owners in bidding/award of PEL/PML lease thereby guaranteeing feedstock to their refinery’’

He recalled that recently, government directed the sale of crude oil in Naira to Dangote Refinery and other refineries to eliminate the need for forex to purchase the feedstock for local refining.’’ Going forward, Government wants to reaffirm its commitment on crude sale to Dangote refinery and other upcoming refineries in naira. ‘’

Also, he said that government we will ensure the deregulation of the downstream sector is 100% and put in place necessary framework that will ease the effect on the poor masses.

According to him, the Ministry has facilitated easier access to existing tax and other exemptions on refinery equipment’s importation which is part of our plan to make Nigeria self-sufficient in petroleum products and become Africa’s Petroleum refining hub

He stated that with the  Midstream and Downstream Gas infrastructure Fund (MDGIF) which sources it funding from the sales of petroleum products in country. Government is looking at using the  fund  to support infrastructural development for refineries like in the Gas value chain being the one of the highest contributors to MDGIF.

The minister noted that the  PTDF and NCDMB will be partnering  with international institutions in knowledge transfer for man-power in refinery operations, Investment in Research and Development (R & D) to support technological advancements and innovation in the refining sector.

‘We also intend to create the apprenticeship programs in collaboration with existing refineries to develop expertise in our refinery operations; this is in an  efforts to discourage the act of crude oil theft and illegal refining by the Artisanal refiners, the Ministry setup an inter-ministerial/agencies committee on Home-grown Solution to in Country Refining.’ He stated

‘’One of the prime recommendations made by the Committee is that the crude oil refining technology jointly proposed by ABU, FUPRE, and PTI should be adopted by Government for in-country refining. We intend to work with CORAN and other stakeholders to actualize the implementation of the recommendations of the Committee’’

He urged the  refinery operators to comply with the provisions of the ECOWAS Hydrocarbon Development Policy (EHDP) by ensuring adequate compliance with Afri 5 specification (50ppml), implement strict environmental standards, incentivize the adoption of clean technologies in refining processes and develop a comprehensive waste management and recycling program in tandem with our global commitment to net-zero by year 2060.

‘’This we are religiously pursuing to make Nigeria a refining and petrochemical hub in Africa by Collaborating with neighboring countries to explore opportunities of the African Continental Free Trade Area (AfCFTA) for joint refinery projects and regional energy markets while promoting energy efficiency and sustainability practices in the refining industry.’’

He noted that Refinery development is a strategic imperative for Nigeria’s economic growth and energy security. Through increased domestic refining capacity, a supportive regulatory environment, technological innovation, environmental sustainability, and local content development, Nigeria can position itself as a major player in the global refining industry which can create jobs, generate revenue, and reduce its dependence on imported refined products.

‘’We are therefore using this platform to call on well-meaning investors to invest in Nigeria to bridge the refining gaps in view of the renewed drive of government to ensure an enabling environment for refinery development.’’

‘’As a government, we are prepared to take feedback from this forum, to guide and improve our policy formulation for effective and efficient refinery development in Nigeria.’’ He stressed.