Hon. Dr. Dawari I. George Member, House Committee on Petroleum Resources (Downstream) National Assembly, Nigeria

Transcription

1 Hon. Dr. Dawari I. George Member, House Committee on Petroleum Resources (Downstream) National Assembly, Nigeria

2 1.0 INTRODUCTION I will discuss the topic under five headings: 2.0 State of Refining and Refinery infrastructure in Nigeria 3.0 Regulatory framework and fiscal policy 4.0 Proposed Petroleum Industry Bill (PIB) 5.0 Challenges of the Refining sector in Nigeria 6.0 Interaction with the wider Refining Community and lessons from Nigeria

3 2.0 State of Refining and Refinery Infrastructure in Nigeria S/ N LOCATION CAPACITY YEAR 1. Port Harcourt Refinery 60, 000 b/day Warri Refinery 100, 000 b/day Kaduna Refinery 100, 000 b/day Port Harcourt 2 150, 000 b/day 1988 Refinery

4 Until the late 1990 s, the Nigerian refineries averaged over 80% capacity utilization. But a combination of factors led to the decline in performance of the refineries, currently averaging 20% capacity utilization. Some of the factors are: (a) Delays in executing Turn Around Maintenance (TAM) of the refineries (b) Funding gaps/funding issues (c) Inappropriate refinery business model (d) Supply chain issues (pipeline related) (e) Poor distribution infrastructure (f) Parallel markets and illegal exports (g) Corruption (h) Poor management (Nigeria s National Refineries Special Task Force alleged that the country s refineries are the worst managed on the continent of Africa).

5 (a)poor distribution infrastructure (b)parallel markets and illegal exports (c)corruption (d)poor management (Nigeria s National Refineries Special Task Force alleged that the country s refineries are the worst managed on the continent of Africa).

6 3.0 Regulatory Framework and Fiscal Policy

7 4.0 Proposed Petroleum Industry Bill (PIB)The key objectives of this reform bill are: (a) Create a conducive business environment for oil and gas operations thus enhance the exploitation of oil and gas in Nigeria (b) Commercialise the government s interest in the industry (by turning the national oil company into a fully capitalized, accountable and profitable entity) (c) Deregulate and liberalised the downstream petroleum sector; (currently Nigeria s downstream sector is highly regulated thus stifling investment flow into the sector)

8 (d) (e) (f) (g) (h) Optimize gas supplies to the domestic gas market (especially for power generation and industries) Reform the fiscal regime Promote openness and transparency Create effectiveness and efficient regulatory agencies and Encourage the development of Nigerian content in line with prevailing global realities.

9 5.0 Challenges of the Refining Sector in Nigeria Interaction with the Wider Global Refining Community Nigeria is four things to the global petroleum refining community: (1) Nigeria is a major producer of crude oil which is the key feedstock in refining; (2) It is also a major consumer of petroleum products by reason of its population (one hundred and sixty million persons, high volume of economic activity projected GDP 7.5%), and government policy which supports importation of products and subsidy; (3) Nigeria is home to four of Africa s 57 refineries (44 operational, 13 shutdown), thus a major refining centre in the continent. (4) Nigeria has untapped gas reserve and gas market that is under explored; making it the future centre of downstream gas activities.

10 Conclusion