INDUSTRY experts have identified some key factors inhibiting the establishment of new petroleum refineries in the country to include corruption, poor infrastructure, oil theft and economic instability associated with Foreign exchange (Forex) volatility.
Speaking at West African International Petroleum Exhibition and Conference, WAIPEC, organized by the Petroleum Technology Association of Nigeria (PETAN), Dr. Moses Omatsola, former Managing Director and Chief Executive Officer, Conoil Producing Limited, said unless these issues are addressed it may not be possible for private investors to participate in the sector.
“We need to deal with ills such as corruption, poor infrastructure, oil theft and economic instability associated with Forex volatility. These are the issues that may prevent the oncoming of new refining capacities,” he stated.
Omatsola also said that since there are plans to increase capacities in Nigeria, Ivory Coast and Niger Republic, the private sector should take the lead, but noted that this will only be possible if the right environment is created.
Mrs. Seyi Afolabi, Executive Director/GM Business Development, Mobil Producing Nigeria Limited, noted with dismay the absence of refineries in the West African coast as most countries within the region prefer to sell crude instead of refining the product.
Her word: “The economies of most oil-rich West-African countries are based on crude exports. Even though some of these countries have refineries, traditional crude oil export tends to dominate most of their economic base and therefore exacerbates the resource-curse syndrome. Analogous to this is the fact that our domestic petroleum products market is under-satisfied and yet we put more energy towards increasing oil export.”
Earlier, Group Managing Director, Nigerian National Petroleum Corporation NNPC, Dr Maikanti Baru, called on indigenous oil companies to partner with other companies for a better synergy to drive oil and gas investments.
Baru, who was represented by Dr Siky Aliyu, Managing Director, National Engineering and Technical Company (NETCO), maintained that the possible way out of current challenge of low oil price in the industry is for a joint partnership of all operators.
“The only way to weather the oil and gas sector challenges and stiffer international competition from international companies is for indigenous companies to collaborate, as it would also help reduce their cost of production and prices.