Modular refineries & Illegal Bunkering : How workable is FG’s proposal

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Modular refineries: How workable is FG’s proposal

February 22, 2017  Ebenezer Adurokiya – Warri Niger Del

ACTING President Yemi Osinbajo, last week in Port Harcourt, the Rivers State capital, announced to the admiration of Niger Deltans of Federal Government’s plan to license the operation of modular refineries.

InsideNigerDelta has, on several occasions, made the above call as a way of arresting the nagging challenge of illegal bunkering, crude oil theft and environmental pollution that have become a pastime in the oil-rich region.

With the current dwindling fortune of crude oil price at the international market coupled with high exchange rate,  Nigeria  economy has been on the decline.

It, therefore, becomes imperative that the country seek alternative to keep the economy running, hence the idea of the modular refineries could just become one of the ways the country can edge out of the woods.

 

What are modular refineries?

Speaking to InsideNigerDelta, former commissioner representing Ethiope West, Okpe and Sapele local government areas of Delta State, Chief Henry Ofa defined modular refinery as “a mini refinery built within a capital limit and time compared to the traditional refinery that takes time and huge capital,” adding that it is “a plant constructed on a skid structures that can be easily moved to locations of comparative advantage.”

According to him, “modular refineries are built in units and can achieve between 25, 000 and 30, 000 barrels per day and they are one of the ways to guarantee peace and boost development in Niger Delta region and beyond.”

 

Benefits of modular refineries

There are immediate and remote benefits that can be drawn from operating modular refineries, particularly the Nigeria’s Niger Delta.

With the scourge of unemployment ravaging the country, establishment of modular refineries can boost capacity to create employments as illegal refining plants could be merged.

To Chief Ofa, “pipeline vandals would be engaged meaningfully,” observing that the “Nigeria market is big enough to consume the products and export surpluses.”

Ofa, who advised the FG to go ahead with the plans and involve all stakeholders without prejudice, added that it will “reduce the importation of refined crude oil products and expand the country’s refining capacity” as well as “temporarily boost foreign exchange.”

Coordinator of the Centre for Peace and Environmental Justice (CEPEJ), Comrade Sheriff Mulade and the National President of the Foundation for Human Rights and Anti-Corruption Crusade (FHRACC), Alaowei Cleric Esq., listed the benefits accruable from the idea of licensing modular refineries.

Supporting the submission of Ofa, Comrade Mulade said the idea, if crystallised, “will create legitimate employment opportunities thereby reducing poverty within the Niger Delta Region, reduce criminality as youths will be gainfully employed, busy in legitimate business and would think less of being involved in illegal bunkering and criminality thereby creating a peaceable environment for enterprise to thrive.”

Mulade, who’s chairman of Kokodiagbene community in Gbaramatu Kingdom of Warri South West Local Government Area of Delta State, added that the idea will “create basis for expertise, professionalism and further training in the oil and gas industry, reduce the abuse and degrading of the Niger Delta environment and government will earn more revenue through tax and increased production of both crude and refined oil.”

Describing modular refineries as the best approach to tackling illegal oil bunkering and stealing of crude oil in the region, Cleric stated that :This has been the suggestion of the Niger Delta people that instead of clamping down on the local refinery operators or destroying the local crude oil reservoirs as well as their camps to further degrade the environment, let the government give licence to the illegal bunkerers to operate.”

According to the activist, some of the benefits include halting the deregulation crisis in the oil and gas ndustry.

“You will see that there will be surplus of petroleum products in the country to the extent that we may not even need to depend on the imported products.

Niger Delta will turn out to be Apapa Wharf where marketers will throng into the region to buy the products. We are very certain that if the government legalises these illegal bunkering business in the region, it will no doubt address youth restiveness.

The menace of sea piracy in the creeks will also be curtailed if the government allows the local operators to participate in the crude oil production.

That of course, also means an  equity participation by the indigenous communities in the petroleum industry and it will go a long way in dousing the tension in the region,” he noted.


THIS DAY 2014

Igwe: Modular Refineries Will Address Perennial Shortage of Petroleum Products 

Prof Godwin Igwe is the Director, Centre for Gas, Refining and Petrochemicals, Institute of Petroleum Studies,

University of Port Harcourt. In this interview Chika Amanze-Nwachuku, he posited that setting up modular

refineries at strategic demand locations in Nigeria will put an end to persistent shortage of petroleum products in

Nigeria. Excerpts:

In the recent time you have been very passionate about modular refining system, what is fuelling this passion?

Leaving Nigeria in 1971 and returning in 2011 to find our citizens queuing endlessly at petrol stations for petroleum

products, specifically premium motor spirit (PMS) and all other petroleum products, made me sick. It’s painful for me to see

this in an oil producing country. So I thought, why wait for things to happen instead of making things to happen? Yes, a

simple modular refinery could solve this problem of fuel scarcity, hereby making life better for our people.

Do you think modular refining is the answer to Nigeria’s products demand challenges and why?

A focused, educated, local experts or think tank would consider the demand and supply needs of our citizens and proffer

solution. The first solution to filling the gap should not be to import, but to locally satisfy this demand. Long term thoughtful

strategy is very important. Personal primitive acquisition of wealth is not the solution. Therefore, setting up modular

refineries at strategic demand locations would be a stop-gap pressure reducing measure to the product demand

challenges. Fuel shortages will be greatly reduced if the companies/investors issued with licenses were committed and not

use the licenses as a launch pad to seek contract for crude oil export. As they say, build it and they will come. We are yet

to see the result of the proposed six refineries to be constructed in modular forms within 30 months, at a cost of $4.5 billion,

each refinery processing 30,000 bpd, with expected total output of about 30 million litres of fuel every day. So, after over 20

months after the said MoU was signed, there is nothing on the ground to indicate that the project has actually commenced.

According to Dangote, “with global demand for crude oil projected to keep dropping, the way forward is for us to start

exporting refined products rather than crude. We will get far better money value that way… All I will do is buy crude oil at

the market price, refine and sell to marketers at the market price. If government continues to subsidise, marketers can buy

products from us and then collect the subsidy from government.” Modular refining is flexible and cost-effective supply option

for crude producers in remote regions. This is particularly true where there is a need to adapt rapidly to meet local

demand. Relatively low capital cost, speed and ease of construction are key advantages of a modular refinery.

How economic are the modular refineries compared to conventional refining system of big fluid catalytic cracking units

(FCCUs) as we have in the nation’s four refineries?

Economic of scale is important here because you do not want to compare apples and oranges. The four big refineries have

different product slates and processing units, that’s why they are conventional refineries. A modular unit specifically targets

specific products, e.g., gasoline, kerosene, diesel, etc. Adding a catalytic cracker unit will enable higher quality processing

and profit margin. I think the main economic driver is the cost of buying the crude. It will become profitable if the

entrepreneur could crack the bottoms to make more useful products. That’s the only way it could become profitable, in the

long run. The addition of a FCCU or a hydrocracker significantly increases the yield of higher-valued products like gasoline

and diesel oil from a barrel of crude, allowing a refinery to process cheaper, heavier crude while producing an equivalent or

greater volume of high-valued products. In our own case with lighter, sweeter crudes, we might need only primary

distillation capacity, which means less capital expenditure. Adding a catalytic reformer unit (CRU) produces high octane

gasoline from naphtha.

If it’s so economic, why is the federal government still shying away from adopting this system?

Remember, government is not there to make profits, but to regulate and create the environment for entrepreneurs to thrive.

Setting up a modular refinery will enable employment opportunities to be created for the citizens. When you have a job,

you could train your children; you could have banks, hospitals, grocery stores, carpenters, accountants, lawyers, all kinds of

occupations to support a town, all through the manufacturing of a product that provides employment. We need to convince

and persuade the government of the economic benefits from modular manufacturing processes. The government is shy

from adopting this system because of the fear of subsidising for crude oil, just like the current NNPC petrol stations. If the

modular refinery entrepreneurs could justify economically, net present value and return on original investment, the

government will sell crude to them at prevailing market value. For modular refineries, our marginal field operators are in a

better position to operate since they produce the crude to be refined without going through all the licensing processes.

Could you cite an example of an oil producing country like Nigeria that has adopted the modular system for either short term

or long-term measure to meet its domestic petroleum products demand?

Most troubled oil producing countries have modular refineries. In the past 20 years, only three Greenfield refineries have

been constructed in Africa. These were built in Adrar (Algeria) and Khartoum (Sudan) with China National Petroleum

Company (CNPC) partnering with the governments, with capacities of 13,000 barrels per day (bpd) and 100,000 bpd

respectively.

The third one was built in Alexandria (Egypt) by Egypt General Petroleum Corporation, Egypt’s national oil company (NOC)

with a capacity of 100,000 bpd. Planned new builds were constructed by Petrochina at Ndjamena (Chad) and Zinder (Niger)

with same 20,000 bpd capacity. The third is being constructed by Sonangol, Angola’s NOC at Lobito (Angola) with a

capacity of 200,000 bpd. From the foregoing, refining in Africa is led by NOC’s, and new investments are dominated by the

Chinese National Petroleum Companies.

Can the modular system rescue some indigenous companies that were licensed many years ago to construct private

refineries?

If you consider the petrol filling stations currently in Nigeria, you will observe that ownership is by well-connected politicians

and their friends. Similarly, those indigenous companies that were licensed many years ago to construct private refineries

are waiting for subsidies from government. If the indigenous companies are indeed serious, they will refine by buying crude

oil at prevailing market price. Economic viability comes from cracking to add gasoline to the mix. Oil and gas value chain

touches consumers through thousands of products such as fuels (gasoline, diesel, jet fuel, heating oil and non-fuels

(asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals)). Oil contributes over 80

per cent of Nigeria’s revenue stream but only about 13per cent of GDP due to its limited linkages to the domestic sector of

the economy. Nigeria currently exports about 2.2 mmbbl/d mostly crude oil. However, nearly 80 per cent of the fuels

demand in Nigeria is imported (about 30 million litres/day of PMS), fuelling a significant part of our current account deficit.

Diversifying refined products from fuels only PMS, automotive gas oil (AGO), Kerosene, low pour fuel oil (LPFO) to value

added feedstock for domestic manufacturing is vital to link the oil sector to the domestic economy and increase the

contribution of the oil industry to GDP growth. Many natural resource rich countries are diversifying and transforming their

economies using the hydrocarbon value chain for wealth creation. In Nigeria, diversification should include diversifying the

energy mix (from oil to gas) and fuels to non-fuels. Diversification will result in wealth creation through employment

generation, import substitution and GDP growth. The keys to successful transformation lies in four strategies namely: a)

Create national focal point for developing industries beyond fuels; b) Clear fiscal system for midstream oil with fiscal rules of

general application; c) Right incentives through price deregulation; d) Industrial parks with pre-investment in infrastructure

by the State. An integrated approach to implementing the identified strategies is vital for the expected wealth creation to be

realised.

Funding has always been a major challenge in either turn around maintenance of existing refineries or constructing

Greenfield ones, how easy will it be for investors to get financial support for modular refining?

Turn-around maintenance is a standard operating procedure for refineries all over the world. It is only in Nigeria that it

becomes an issue because of poor technical leadership of the industry. We need a dedicated technology group to take

ownership of our processes such that any maintenance problem in Port Harcourt, Warri or Kaduna is solved immediately

just like Boeing Corporation sending their crack technicians to anywhere in the world where their airplane has a mechanical

problem. If an entrepreneur will demonstrate to an investor a clear financial economic business plan showing profitability

and return on investment, including cost of crude oil, investors will definitely support. This also requires the passage of PIB

to show seriousness with investments in the downstream industries. Have you ever seen a patriotic country procrastinating

on a law that will provide upward mobility for their country? Yes, Nigeria. Electing people who are knowledgeable and

educated matter.

To understand turnaround maintenance, remember that machines and other service facilities are subject to deterioration

due to their use and exposure to process and environmental conditions. This deterioration requires to be duly taken care of

by various maintenance interventions, techniques and at certain pre-determined intervals so that required use of facilities

can be continued and service life extended until the point where maintenance costs become prohibitive and replacement

action becomes inevitable. Our own car periodic service maintenance is an example.

Where an operating plant such as the refinery, must be shut down until work is completed and then restarted, thus ‘turning

around’ the unit or plant is called Turnaround Maintenance.

The American Petroleum Institute (API) defines turnaround as a periodic shutdown (total or partial) of a refinery process unit

or plant to perform maintenance, overhaul and repair operations and to inspect, test and replace process materials and

equipment.

Turnaround maintenance activity is required to undertake work that cannot be accomplished while the plant is operating.

The Turnaround period is that time a unit is off stream, i.e. between product cut-out and unit being brought back on-stream.

Unplanned outage of equipment in refineries, affect the continuity of operations. Overhaul of such equipment is thus carried

out during planned Turnaround Maintenance of the process and utilities units. Unscheduled shutdowns result from

equipment failure or process upsets. Executing TAM as and when due will eliminate or minimise unscheduled shutdowns.

Turnarounds are a critical part of refinery business and are the single most costly part of a plant or process plants

maintenance budget.

Some activities during turnaround maintenance (TAM) include but are not limited to the following: Internal inspection of

static process equipment / piping which cannot be done during operations; Corrective work resulting from such internal

inspections: e.g. replacement of damaged refractory materials, distillation trays and other column internal; Cleaning,

maintenance, repair and complete overhaul of rotating/reciprocating, electrical and instrumentation equipment; Complete

overhaul of all pressure relieving devices; Cleaning and complete overhaul of all regulating and controlling instruments

whose outage can be taken only during a turnaround of the plant; Cleaning and overhaul of electrical switchgears, electric

motors etc; Carry out modification jobs to take care of maintenance and operational needs, upgrade technology through

use of modern equipment, and make the plant more efficient through maintenance and operating costs and increasing

throughput; and Carryout items of work that improve safety and environmental aspects of the plant.

It therefore, becomes essential that goals of turnaround work be as follows: All work targeted to be done during turnaround

be completed within pre-determined period; The total expenditure towards turnaround activities be within the approved

budget; The turnaround work be carried out without any accident; and the quality of turnaround work be such that all

equipment while in operation function in top class manner till the next Turnaround.

The above can only be achieved if: Work to be executed during turnaround are well defined; Planning of work to be done

through own workforce, vendor specialists, reputable contractors be carried out early enough so that everyone involved has

adequate time to study the same efficiently and be fully ready to execute; Materials requirement is thoughtfully carried out

and materials procurement done in such a way that all materials are available before the Turnaround (at least 75 per cent

before oil-out.

Some key facts and guarantee for a sustainable turnaround maintenance include: Allows for necessary maintenance or

upkeep of operating plant and are needed to maintain safe and efficient operations; Best practice is that Turnarounds are

scheduled to take place after every two years operation; In assessing whether to delay a turnaround, a refiner has to

include the opportunity cost of a possible unplanned shutdown resulting from the decision to delay the turnaround;

Depending on the process unit and the amount of maintenance needed, the length of the turnaround can vary from four to

six weeks; A turnaround is not necessary to enable a refinery to shift from gasoline mode to distillate mode. However, if a

turnaround is planned, it is possible to use the opportunity to effect planned changes such as catalyst upgrades that could

improve the distillate yields. Funding modular refineries will be easier compared with conventional refineries. In general, the

less often units are subjected to unplanned shutdowns and start up, the better (safer) it is, since refinery incidents are more

likely to occur during these occasions. Guarantee for sustainable turnaround maintenance include: Develop a specific

turnaround implementation plan in stages; Planning – the cycle can be from one major turnaround to the start of the next

turnaround; Resource organisation- procurement of long lead delivery items / labour; Workscope Management –

turnaround are complex and demanding (full job lists and inspection); Preparation of units – good purging and steaming out,

spading/ blinding/ scaffolds; Specialised equipment / resources mobilisation- such as very large cranes, catalyst handling

equipment and bringing in of vendor specialists to perform/oversee specific maintenance works; The turnaround work

period 4-6 weeks; The final report covering equipment, contractor performance, costs and lessons learnt shared with all

stakeholders; Establish committees early with well-understood decision making – a committed, qualified and integrated

team; Appoint or select a contractor early and involve them in the planning process; Begin the processes for the next

turnaround immediately following completion of the current one. Also, benchmark best practice plants.

On security issues, upsurge in the incidents of crude oil theft and other criminal activities in the sector are greatly affecting

the future of the Industry. Theft of crude oil pumped to the refineries is estimated at an average of twenty 20 percent. The

loss of revenue is significant to the stakeholders. The attendant pollution and environmental degradation from this criminal

theft is huge. Also, the integrity of the pipelines is comprised. Unfortunately, several enemies of the Nation’s progress are

involved in this nefarious activity. To do nothing means to mortgage our future and that of our children yet unborn and

continue to subject our beloved nation Nigeria to continue importation of petroleum products at huge cost and drain to our

scarce foreign exchange. We appeal to the communities in the affected areas to rise up against these miscreants. To do

nothing is not an option. It is our collective wealth and honour that is being besieged.

Sustainability of refinery operations can only be achieved through efficient management of shutdowns and regular

Turnaround maintenance, achieved through in-country capacity building and development.

In view of the ongoing reforms in the petroleum industry, why are downstream operators/investors not thinking in the

direction of modular refineries?

If you can fly, why walk? If you can import or not import and yet collect or earn revenues, why bother to construct or

produce anything?

In the recent time, the federal government has been criticised for clamping down on illegal refineries in the Niger Delta.

Critics argue that government should instead have harnessed the raw skills and transformed them into modular systems.

Do you think that this is logical?

Yes, I think it is logical. To reduce unemployment, we have to turn the ‘illegal refineries’ into “legal refineries”. To make this

to happen, we need to design a strategy and policy to set up an energy bank to provide financing, taxable at low interest

rate. My colleagues argue investors should buy crude at competitive market price. I will argue we sell crude oil to them at

slightly subsidised price. If you legalise, then you stop bunkering because it becomes unprofitable for their sponsors. They

will become proud “owners” of a business, and kerosene, petrol (gasoline), diesel, will be everywhere, satisfying the

demand in the country. Remember the British and our illicit gin? Yes, they turned round and sold us Gordon Dry Gin. I will

persuasively argue that offering them opportunity for ownership, to set up their own businesses, will be a disincentive to

break pipelines, hence, becoming useful citizens. If you think about it, who is the real loser in all these?, we, the people.

Let our successful businessmen and politicians set up industries in their home towns. Providing jobs for your fellow citizens,

in your village, is a legacy to remember when we are all gone. Remember the funeral song….”only remembered by what

we have done”?

The “illegals” already have the necessary raw production skills. We just need to provide guidance and training. The

knowledge gap in distillation processes will be provided on appropriate standards, codes, specifications, and catalysis. This

will in turn stop environmental pollution and degradation because all the refining fractions currently poured in rivers

(depriving us of safe and reliable drinking water), will be fully utilised in some other process plants. Stopping pollution is

very important, because having money is no guarantee of good health. By providing jobs and reducing unemployment, the

Federal Government and 36 states will then have enough money to share.

Path forward, we need to stay technically focused. We need to develop value systems that see service above self-interest.

The world is changing, where previously, hard men, now know when to be soft with their people. There is potential for

growth, and we should not under-rate human ingenuity and innovation. So, the issue here is clear: a) Prioritise and test the

idea of modular refineries; b) set up a Refining and Petrochemicals Authority to have a focal point, and c) let illegal become

legal. It is sound reasoning. It is practicable. It is demonstratively a true paradigm shift for the good.

Finally, how soon do you think Nigeria can get out of importing refined products to exporting them like crude, as expected of

a big producer?

Have you heard the saying: “If you cannot beat them, join them?” Refining is a mature technology. It is governed by

standards and specifications. Most of the Middle-eastern refineries are in partnerships with IOCs. With these partnerships,

you will not have shortages in spare parts, manpower and capacity building. It is a question of live and let live. What you

do not have, you make up. It appears we are always sleeping, not thinking long term. We are always waiting for things to

happen, instead of making things to happen. There will be no development if we do not produce, manufacture, make

things, design things, right here in Nigeria. So, “as more countries are discovering oil, Nigeria’s exports will begin to drop at

some stage. In addition, with climate change, development of alternative fuels, that is bad news for crude oil producers. Our

case is even worsening because of frequent production outages and unprecedented oil theft, despite the billion-naira

contracts awarded to militants to safeguard the pipelines. We are taking loans every day and our debts are piling up. The

world’s biggest consumer of crude, the U.S., has now found a formidable alternative in shale oil. So, the demand for our oil

has fallen and will only continue to fall. The new reality is that crude oil is no longer a monopoly. As demand falls, the price

will fall. As the price falls, production will fall. Many oil fields will become unprofitable to operate. They are likely to close

down. In this event, the naira would crash. A fall in foreign exchange inflow will hurt us since we are import-dependent. If we

deplete our external reserves to protect the naira, it would impact negatively on the general prices of goods and services,

hence, less money to build infrastructure, less money for government overheads, leading to retrenchment and salary cuts.

Money to fund fuel subsidy and petrol price will increase and as petrol price goes up, mass unrest will ensue as cost of

living rises”.

Some experts lay the blame for the smooth take-off of modular refinery on the doorstep of the National Assembly for their

delay in passing the Petroleum Industrial Bill. This is so because the PIB contains mechanisms to deregulate the

downstream sector to make it price competitive which encourages direct foreign investment. Do you share this view?

Yes, I agree. The market drives and regulates prices. Private enterprises could process the residues (bottoms) from a

refining process to make extra revenue, making them competitive. Let the National Assembly pass the PIB. It is long

overdue. Regulation in the downstream petroleum sector discourages investment: Companies invest where there is clear

and transparent mechanism to recover cost and earn a profit. Regulation has other downsides, e.g., it lacks fiscal

sustainability: subsidy funds are required for other critical sectors of the economy; regulation distorts markets: encourages

hoarding and smuggling and creates arbitrage opportunities (black markets). Regulation benefits mainly the wealthy and

middle classes, with a limited share going to those Nigerians most in need.

You recently organised an international conference on the gainful employment potentials in the oil and gas sector. What

was the outcome?

It was a very successful conference. The following observations were made:

That the gas, petroleum refining, petrochemical and fertilizer industries provide the catalyst which ensures the country’s

growth and sustainable development through diversifying the revenue stream and growth in other sectors rather than

continuing to depend on costly importation and the resultant drain on our foreign exchange earnings.

Many natural resource rich countries are diversifying and transforming their economies using the hydrocarbon value chain

for wealth creation, e.g., SABIC (Saudi Arabia Basic Industries Corporation). It focuses on manufacturing, using oil by-

products as feedstock. It is a Holding Company, with investment in Joint Ventures with oil majors (SADAF). It is not an

operator and does not have 100% ownership. The structure ensures commercial operations and commercial viability of its

business arrangement across the world. Its investments are not only domestic, but international, to secure markets for its

oil by-products. SABIC’s diversification strategy includes market diversification.

There are many opportunities for Nigeria to harness and maximise the oil and gas value chain, and that these opportunities

will significantly improve the revenue streams from the downstream sector as well as have multiplier effect on the Nation’s

economy.

For tremendous success in employment generation and wealth creation to be made, more needs to be done in enhancing

the enormous opportunities that abound in the oil and gas sector. Likewise, the absence of strong entrepreneurial activities

in any nation makes the country to be perpetually import-dependent with the resultant adverse economic and security

consequences.

That a very high GDP figure means very little if it does not translate into jobs and wellbeing for the youths and teeming

masses of our people. What matters is the GDP per capita, where we stand on the human development index, in quality of

life for our people. This is the challenge for industry and the Government.

The Conference particularly noted the enormous opportunities that abound in the gas industry vis-à-vis Gas-for-power; Gasfor-industries;

Gas-for-fertilizers etc.

The conference recommended as follows:

• There is urgent need for massive investment in the Nigerian Refining & Petrochemicals (R&P) industry. Development

in this sector will not only diversify and transform the Nigerian economy, it will provide an alternative market for the country’s

crude oil and natural gas resources and make the country less susceptible to the vagaries of the international oil and gas

market.

• There is need to create a national focal point for developing industries beyond fuels. Public-Private-Partnership has

worked at Indorama Eleme Petrochemicals Limited (IEPL) and NOTORE Chemical Industries Plc. This model should be

extended to all public and private industries in Nigeria for sustainable development and employment generation.

• A necessary fiscal system that is supportive of high value hydrocarbon spin-off industries, but not dependent on cost

recovery from upstream oil activities is advocated. The Conference calls on government to provide various incentives to

enable this sector to operate optimally.

• Appropriate incentives and enabling environment should be provided by Federal and State Governments to support a

commercial framework for the development of gas, petroleum refining, fertilizer and petrochemical industries.

• In Nigeria, diversification should involve varying the energy mix (from oil to gas) and from fuels to non-fuels.

Diversification will result in wealth creation through employment generation, import substitution, and GDP growth.

• It was also recommended that government should take the following steps: Create national focal point for developing

industries beyond fuels; clear fiscal incentives to promote investment in the midstream oil and gas sector and industrial

parks with pre-investment in infrastructure by the state.

• Grass root industries should be encouraged in the agricultural sector and there is an urgent need for more farmer

education especially on fertilizer application and the use of improved seedlings, as this will further provide employment

along the value chain.

• There is need for greater connection between University researchers, government policy makers, and the industry.

The Federal Government needs to invest in research and knowledge generation for innovation and development, and to

ensure continuous integration and collaboration. Specific sponsorship should be provided for human capacity building in

research centres by government, and internship of students in companies.

• There is need for government to deal with the issue of pipeline vandalism without which the new investments in the

industry cannot thrive. There is need therefore for more investments in production and delivery of gas to the industry.

Finally, in the drive towards enhancing employment and development opportunities through gas, petroleum refining,

petrochemical and fertilizer industries, Conference stressed the need to arouse a new level of interest towards getting to

work in order to eradicate unemployment: “We must begin to work and not talk about work”.

Why do you think it is hard for the authorities to harness the dividends of this sector?

It is hard to harness the dividends of this sector because we do not have the appropriate technical vision and drivers to take

ownership. It is easier to make money running political outfits and other non-productive activities. You do not have passion

for what you do not understand. We are consumers and not producers. You cannot become developed if you depend on

others to produce your machineries, your food, your cars, your refined products, your investment strategies, etc.

Technology plays a vital role in the systematic transformation of the production systems and capacities. Development will

always depend on the internal innovative capacities of a society, for it is man rather than machine that creates

products as feedstock. It is a Holding Company, with investment in Joint Ventures with oil majors (SADAF). It is not an

operator and does not have 100% ownership. The structure ensures commercial operations and commercial viability of its

business arrangement across the world. Its investments are not only domestic, but international, to secure markets for its

oil by-products. SABIC’s diversification strategy includes market diversification.

There are many opportunities for Nigeria to harness and maximise the oil and gas value chain, and that these opportunities

will significantly improve the revenue streams from the downstream sector as well as have multiplier effect on the Nation’s

economy.

For tremendous success in employment generation and wealth creation to be made, more needs to be done in enhancing

the enormous opportunities that abound in the oil and gas sector. Likewise, the absence of strong entrepreneurial activities

in any nation makes the country to be perpetually import-dependent with the resultant adverse economic and security

development. Technology transfer, therefore, becomes a myth for non-productive nations, and a reality for the nations with

new means of production, capital formation and technical knowledge. Sustained economic growth is then further ignited,

accentuated and escalated by increasing technical wisdom. Do we have that requisite innovative, financial, self-discipline

for technology to thrive…designing, making, producing and manufacturing goods to satisfy our needs before exporting?

No society has ever been greater than the products of its higher institutions of learning. Therefore, deep thought is required

in the way government relates to its educational institutions as “laboratory think tanks”.

Can you in a few words explain the attraction of modular refinery in the way a lay man would understand it?

Yes, the modular refinery is like the big refinery in a miniature form. It is not the size, but what in can produce. It is like a

luxury Mercedes Benz with all the bells and whistles and a Volkswagen car. They all have four tires and a steering wheel,

moving you from point A to B. Most importantly, you get your petrol and kerosene without queuing and without paying a

high price.


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