Future of Nigeria’s Oil & Gas Is In Private Sector Refining

SEATTLE (Oil Monster): Dr. Emmanuel Kachikwu, Minister of State, Petroleum, in President Buhari’s just-ended first term has said that the future of the Nigerian oil and gas sector lies in private sector refining, as a result of which the Federal Government is creating an “enabling environment to support investment.”

Dr Kachikwu who said this during a parley with newsmen in Abuja disclosed that this is why government is working hard outside the public sector to support the Dangote refinery project. He also said that the modular refinery which was “a concept we used to push for peace in the Niger Delta” is currently working successfully. Three are near production point; about seven others are nearing FID (Final Investment Decision).

“If those ten refineries come on board in the next two to five years, that’s another 250,000bpd refining capacity added to Dangote’s. I look at refineries from volume capacity, not physical assets. On a longer time basis, the refinery is also an export earner; we need to be able to supply products to the rest of West Africa, East Africa and Southern Africa. We are almost at the threshold of signing a Memorandum of Understanding (MOU) with South Africa which will not just cover refineries but also cover pipelines and liquefied natural gas (LNG) investment which are huge.”

On oil blocks, Kachikwu clarified the position of government, saying no oil blocks have been given. 

On oil blocks due for renewal, Dr Kachikwu said: “I do not have the numbers off hand. You know we had an early renewal programme to raise N1.80 billion for the government and most of those have been renewed. The ones that are within the frame of 2020-2021 have already been captured by the early renewal. The ones that are after that we have not dealt with. We did close to about 40 renewals under the early renewal programme. The essence of the early renewal was to get upfront money for government to meet its financial obligations.

On the Petroleum Industry (PIB) bill, Kachikwu said that “the bill will limit the size of acreages for splitting, which will allow more investors to come in. It also protects the rights of those who have been given licenses because if we don’t have a safe business environment we can’t raise money, but ultimately a law is as good as its enforcement. As Nigerians, we ought to be willing to make our country grow which will never happen if we are always looking at the short-time growth. So basically, lack of enforcement has to be the bane of our issues.”

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