A Review of the Nigerian Energy Industry

Stakeholders urge speedy action on Nigeria’s Greenfield refineries

10 September 2011, Sweetcrude, Lagos – Stakeholders in the oil and gas sector have urged the Nigerian governmnet to hasten work on the Greenfield refineries planned for three states.

They told the News Agency of Nigeria in Lagos that nothing had happened long after the projects were proposed and lands earmarked by the affected state governments.

The refineries are to be sited in Lagos, Bayelsa and Kogi states.

Mr Andrew Thomas, Managing Director, Skylof-Bethny Oil Consults Ltd., said the only step that had been taken was the clearing of the land, 14 months into the supposedly three-year project.

Thomas, who said he was enthusiastic about the projects, observed that “nothing is happening at the sites at all and there are no visible signs that construction will soon begin”.

“There is need for collaboration between government and investors to make the projects a success in the country,’’ he said.

Mrs Ibilola Amao, Managing Director of Lonadek Consult Ltd., an oil and gas servicing firm, said that the proposed Greenfield refineries might eventually be a mirage.

She said: “We need to talk less and act more; the common fault that Africans exhibit is making statements that are not backed with strategic thinking and planning.

“What have short, medium and long-term plans for increasing our refining capacity and when will the PIB be passed and the downstream deregulated.”

According to Amao, if we do not have holistic picture of our local demand and supply fit into the global market projections, then the country cannot be serious about establishing the refineries.

She added: “This is because the means of livelihood of a select and privileged few is dependent on export of crude and importation of finished products.

“The Nigerian Oil and Gas industry is suffering from dearth of ethical professionals who are much needed to sanitise the industry.’

Amao said that until policies and actions were taken based on economic dictates and freed of policy summersaults, the industry would continue to experience challenges.

Dr. Oladiran Fawibe, Chairman and Chief Executive of International Energy Service Ltd., however, expressed different views.
Fawibe said that the Memorandum of Understanding (MoU) entered into by the Nigerian National Petroleum Corporation (NNPC) with the Chinese firms on the refineries was still on course and robust.
According to him, setting up refinery is quite different from other businesses as it requires detailed study of location, soil analysis, environmental impact assessment and technical survey.
Fawibe said this would be followed by Final Investment Decision (FID) which would involve the total cost of the project, equity ratio, finance and engineering.
“The engineering aspect involves examination of type of product, crude oil to be used and conversion of crude oil to product to yield maximum output,” he said.
Fawibe said that the electioneering period might have slowed down the project and expressed optimism that there would be great improvement on the projects in the next few months.
Prince Dipo Olu-Falade, a community leader of Idotun in Ibeju-Lekki, where the Lagos Greenfield refinery project is being located, said that he was not aware of a project in the community.
“I don’t have any idea that any refinery is about to be located here. No one has discussed that with me,’’ he said.
Dr. Levi Ajuonuma, Group General Manager in Public Affairs Division of NNPC, said that the government had not abandoned the project.
Ajuonuma said that discussions were still on between the government and the consortium of Chinese firms on the projects.
It will be recalled that last year, the NNPC signed the MoU with China State Construction Engineering Corporation (CSCEC) for the refineries and a petrochemical plant.
Under the terms of the agreement, 80 per cent of the project cost was to be funded by the China Export Credit Insurance Corporation and a consortium of Chinese banks.
The project is planned to add 750,000 barrels per day of refined product to Nigeria’s current 445,000 barrel per day production.

Join the Conversation