NNPC’LL Fix Four Refineries, Set Up Condensate Refineries – Kyari
BY TAYO ELEGBEDE
The Nigerian National Petroleum Corporation (NNPC) will fix all the four refineries in the country, the Group Managing Director of the State-owned oil company, Mele Kyari, has confirmed.
Kyari, who gave this indication during Seplat Energy Summit 2020, also noted that renewable energy was not a threat to the oil and gas business.
Nigeria’s four refineries have capacity to refine 445,000 barrels per day of crude oil but have performed below 50% of its installed capacity.
The poor state of the refineries has resulted in the importation of refined petroleum products into the country which is seen as a financial drain and conduit pipe for corruption by the government.
Speaking on the refineries, Kyari said “the NNPC is working towards fixing all the four refineries which are practically not functioning.”
The NNPC boss disclosed that plans are ongoing for the establishment of condensate refineries in the country.
The NNPC, according to him, is collaborating with Seplat Group to look at initiatives such as having condensate refineries.
The NNPC had last November revised its earlier plan to establish two 200,000-b/d condensate refineries to boost domestic refining capacity.
It had let a contract to KBR Inc. to provide project management consultancy (PMC) services on front-end engineering design (FEED) definition for grassroots condensate refineries at Western Forcados Area and Assah North Ohaji South (ANOH) Areas of Delta and Imo States.
Besides the moves to establish condensate refineries, Kyari said the NNPC was also supporting the Dangote Refinery to come on stream.
He described the 500,000 refining capacity Dangote refinery as a game changer for the country.
“There are several other accesses granted by Nigeria for people to create and construct refineries, but they can’t do it because of issues around the market structure, which thankfully have been transited from a regulated petroleum market into a deregulated one.
“It means companies can now predict what product prices would be and they can now make some investments. The banks also can see visibility of cost around recovery,” he explained.
The GMD reaffirmed the Corporation’s oil production target of three million barrels per day saying it is within sight and realistic.
He added that many projects are in line to make it realisable.
“In April one day, we were able to achieve 2.45 million barrels per day without doing much work but with some discipline and cutting cost and ensuring some level of efficiency.
“We are also looking at the market. Will the market take all these as our contribution to the production of borrow pull across the globe.
“We are committed to the OPEC cut because they is no need to produce at $30 oil and sell it at $10, nobody wants, so it is in the best interest of the market to corporate.
“We have a line of sight around when we can stop this production and we are managing all this to boost our condensate through our assets because they are exempted from the OPEC cut,” Kyari stated.
On the threat posed by renewable energy, the NNPC GMD assured that the oil and gas business would still contribute a large chunk of the energy mix.
“The transition to renewable energy is not a challenge to the African continent because investors’ projections have indicated that even by 2040, oil and gas will still contribute up to 70 per cent of the continent’s energy mix.
“Therefore, worrying about the speculations that oil and gas would soon be irrelevant is not important, as all that needs to be done is to be more competitive, reduce cost of production and be more peaceful to enhance economic activities,” he explained.
The NNPC boss stressed the need to expand economies towards growing the middle class, adding that the continent was the next destination of businesses and the place were growth would come from
Kyari said, “For the oil and gas industry to thrive in the midst of the energy transition, two things have to be done and first is to pull down production cost because there is simply no way to sustain the current structure were some assets are producing oil in the excess of $45 to a barrel, an impossibility in today’s circumstances.
“It also means that probably we are subsidising the upstream, and of course no one does that anywhere in the world, so cost has to be managed. But, in the ambition of lowering our cost we don’t want to lose sight of growing local capacity and content in our business.”
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