- Saturday, May 4, 2024
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The former Minister of State for
Petroleum Prof. Emmanuel Kachikwu has corrected the impression that the
inability of the Nigerian National Petroleum Corporation (NNPC) Ltd. to supply
crude to local refineries will rubbish the idea of having functional local
refineries.
Some government-owned and private
refineries are about to commence operation by the end of this month but there
are concerns that the NNPC will have no crude to supply them.
Kachikwu explained in an
interview with reporters at the sideline of a seminar at the University of
Ibadan on Thursday that refineries all over the world import crude oil to
process and sell both locally and export to foreign buyers.
He said private and
government-owned refineries across the country already know that they will
source crude from outside Nigeria, stressing that many foreign refineries are
built in countries that do not have crude oil which makes them import the crude
they process.
He said sourcing crude from
foreign countries only costs a little more than sourcing it locally because the
commodity has uniform international price. He added that NNPC is also free to
choose buyers of its products though it will do everything to feed local
refineries for patriotism and its economic benefits.
Kachikwu urged Nigerians to
support all the efforts to refine crude oil in the country, stressing that the
Federal Government will definitely do all in its capacity to ensure that oil
supply chain is undertaken in the overall interest of Nigeria’s economic
development.
Speaking on the topic ‘Nigeria
Energy Policies: Energy Transition, Domestic Crude Obligation, Oil Subsidy
& PIA’ Kachikwu, who recalled that the development of the Petroleum
Industry Act (PIA) took 20 ‘catastrophic’ years to develop and pass, pointed
out that the slow pace cost Nigeria $15 billion annually with additional loss
of $50 billion investments in the last 10 years.
He said: “It was estimated that
Nigeria has lost about $50 billion in investment over the last 10 years and
according to Rystad Energy, Nigeria was estimated to have lost about $15
billion annually due to the delays in passing the PIB.”
The former minister added that
the delays in the PIB passage was a major reason several large-scale oil and
gas projects were stalled in Nigeria.
“Large-scale projects like Bonga
Southwest-Aparo (BSWA) and Bonga North and Etan - Zabazaba (EZ) have been on
hold largely due to fiscal uncertainties.
“These projects have the capacity
to unlock larger reserves thereby reversing the depleting reserves and boosting
production of hydrocarbons and ultimately generating more revenue to the
government.”
Though he said the PIA is not
perfect, he expressed satisfaction that the legislation eventually saw the
light of the day. He said the government will continue to improve on the law in
order to get the best of the oil sector.
Kachikwu, however, called on the
government to learn from the oil industry mistakes and quickly move to develop
the framework for the identification and exploration of other mineral resources
which are in abundance in Nigeria.
He said the focus was already shifting to clean and renewable energy to address environmental pollution.
“In the last four years, the
focus has been on production or products achieved with low carbon emission. The
world is moving away from oil due to efforts to tackle environmental pollution
leading to global warming. Non-fossil
fuel, solar and nitrogen are the in-thing because they are cleaner energy
sources.
“Once people move away from a
product source, financing for it dries up gradually. The PIA that was
eventually passed was not to me as robust as it should be.
“Nigeria should offer more
incentives to oil investors because new fields are being discovered in other
countries thereby increasing competition. Ours are already developed and
predictable but we must be sensitive to competition.
“I’m still seeing a lot of
government interventions in NNPC. But we should allow NNPC run professionally.”
he said.
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