A Review of the Nigerian Energy Industry

Govt to build new refineries for optimal performance of oil sector – NNPC boss

10 September 2015, Kaduna – The Group Manading Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Emmanuel Ibe Kachikwu, on Wednesday in Kaduna said the Federal Government would consider establishing new refineries for optimal performance of the oil sector.

Dr. Emmanuel Ibe Kachikwu, NNPC GMD

Kachikwu stated this, while addressing Energy Correspondents shortly after he was conducted round the Kaduna Refining Petrochemical Company (KRPC) in Kaduna.

The GMD said the NNPC was working to get the refineries across the country to work to their optimal production with “new business modules, new commercial modules and new approach on how we can get to where we should be.

“What is obtainable is that most of our refineries are close to 30 to 40 years old; we need to begin to look at building new refineries in the same land space where they can share facilities so that you will have something to lean on when these old ones are beginning to kick out.

“Obviously, we need new modules because with this modules it won’t get us very rapidly. Three out of the six units of the plants were down.

“Some of them for a very long period. We need to sit down and see what modules, how do you turn around the new refinery. How do you work on emergency basis components of the ones that is there.

“Kaduna has a very unique place in my heart like I said because I grew up in Kano and I used to come here often.

“It is so key for the survival of the economy of Kaduna State and the rest of the North and we really need to focus on getting this things work and getting it to expand.

“Without them we are not going to get out of problems of fuel supply, power supply and all that. So we are going to have a whole commercial structure,a whole engineering structure; a lot needs to be done different from models we are pursuing right now “.

According to him, “what really is the truth about refineries is that a lot needs to be done in terms of applying different model of development. So we are going to be working to clarify those solutions”.

He said the NNPC management was committed to ensure that within the next 90 days time frame some elements of the KRPC plant would work the way they would be expected.

“But never will we get it to where I will love it to be. So simultaneous reserve will enhance process to see the rest of the units getting to some level of maintenance and repairs.

“ On security of the pipelines, we are doing quite a lot.

“Aas you are aware that we are working with the security forces to enhance the Warri to Kaduna points and they have been tested now for integrity and I think by my understanding for the last testing is that is fairly okay now to take control if the FCC units are working.

“So on a short term basis, we have been able to deal with that medium term basis; we are going to work with the security agencies to ensure that the sort of destruction you find on pipelines not just from Warri to Kaduna, but the whole country, becomes a thing of the past.

“We working on a very enhanced, very robust, very accelerated programme with the security forces to deal with that.

“We are trying everything that we can to it and we are sending a body language that the business of messing around with the pipelines is over and I think the message is going round as laud as ever.“

On the issue of crude oil swap deals, the NNPC boss said that the essence of the swap cancellation was that the company was saving over 200 million dollars by virtue of doing that.

“You have transparency in the deal per month and you have transparency that embedded in those processes.“

Kachikwu said that sufficiency and issue of efficiency had nothing to do with canceling or non canceling crude swaps.

“You less discretion by whoever is making decision in terms of allocation. We can leave trading and focus on what is more important in the oil industry. I can assure you that there are structures put in place.

“You will get product the way you need it. We are working on that. Even though we have canceled swap, you are going to have replacement swap contract lined along very efficient and very transparent processes that will save us lot of money.

“The refineries are not working to global best practice right now; they are all down, so what are we talking about global practices. We are dealing with major situation where pipelines have perpetually tools for destruction.“




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