A Review of the Nigerian Energy Industry

Provide enabling environment for investments in refineries, FG told

Refinery 124 September 2013, Lagos – The federal government has been called upon to provide an enabling environment and appropriate incentives that will attract massive investments in the nation’s refining and petrochemicals industries.

The call was made by participants at the just-concluded conference on ‘Petroleum Refining and Petrochemicals’ organised by the Centre for Gas, Refining and Petrochemicals (CGRP), Institute of Petroleum Studies, University of Port Harcourt, in collaboration with the Indorama Eleme Petrochemicals Limited (IEPL).

The participants observed that in the past 22 years, there has not been any addition to the refinery capacity in the country, adding that the absence of strong entrepreneurial activities in any nation makes it perpetually import-dependent with the resultant adverse economic and security consequences.
In a communiqué issued at the end of the conference and read by Prof. Vincent Idemyor of UniPort, the participants declared that Nigeria’s dependence on importation of petroleum products “is not only unsustainable, but unacceptable for an oil producing country with such a large population.”

They reasoned that development of the refining and petrochemicals sector would not only diversify and transform the Nigerian economy, but would provide an alternative market for the country’s crude oil and natural gas resources and make it less susceptible to the vagaries of the international oil and gas market.
The conference specifically canvassed a vibrant and robust petrochemicals industry, which it said was very critical to the nation’s economic growth. It also urged that government to create a progressive petrochemicals’ policy with a clear roadmap for the development of the sector.
Participants also noted the progress being made by Indorama Eleme Petrochemicals, and recommended that its business model should be emulated.

“There is need to create a national focal point for developing industries beyond fuels. Public-Private Partnership has worked at Indorama Eleme Petrochemicals. This model should be extended to all public industries in Nigeria for sustainable development,” they added.

They also advocated for necessary fiscal system that is supportive of high value hydrocarbon spin-off industries, but not dependent on cost recovery from upstream oil activities is advocated.
“In Nigeria, diversification should involve varying the energy mix (from oil to gas) and from fuels to non-fuels. Diversification will result in wealth creation through employment generation, import substitution, and GDP growth.

“There is need for greater connection between University researchers, government policy makers, and the industry. The federal government needs to invest in research and knowledge generation for innovation and development, and to ensure continuous integration and collaboration.

“As the downstream sector continues to attract massive investments, it is very imperative that strategic communication should be vigorously applied at all levels and across all stakeholder groups to achieve set objectives and desired results.

“There is an urgent need for the passage of the Petroleum Industry Bill in order to realise the full potential of the Nigerian oil and gas industry. There is need for government to deal with the issue of pipeline vandalism without which the new investments in the industry cannot thrive,” the communiqué read.

– This Day

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