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FG to Reactivate Moribund oil, Gas Support Facilities – DPR Boss

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Mr Sarki Auwalu, Director, Department of Petroleum Resources (DPR), says the Federal Government is committed to reactivating all moribund oil and gas support facilities across the country.

Auwalu said this was part of the government’s effort to increase domestic refining capacity and gas utilisation in order to curb unemployment and poverty in Nigeria.

Auwalu spoke on Monday during an assessment visit to Kaztec Engineering Ltd.

Fabrication Yard, Ilase Village, Snake Island, in Amuwo-Odofin Local Government Area of Lagos State.

He expressed dissatisfaction that the facility which was licensed to provide oil and gas services support by the DPR had not been operational since 2015 due to contractual issues.

Auwalu noted that some of the critical equipment in the facility were currently owned by the Nigerian National Petroleum Corporation but were not being utilised for the benefit of Nigeria and Nigerians.

The director said: “The industry depends on facilities like this to actualise their investment because it is like a support system for the oil and gas sector.

“Our visit here is to see an edifice that we licensed and it is dormant, but we are going to make it active because we see it as an opportunity to grow the oil and gas industry.

“We have seen an opportunity we can use to support our gas utilisation, penetration and expansion programme.

“We have issued several licenses for modular refineries that needs fabrications. We cannot allow this kind of facility to remain under-utilised.

Auwalu said some of the fabrication jobs that could be done at the facility were being shipped to China which was not good for Nigeria’s economy.

He added that plans were also ongoing to double the contribution of the oil and gas sector to the nation’s Gross Domestic Product to about 15 per cent from the current eight per cent.

Earlier, Mr Mike Simpson, Engineering Director, Kaztec Engineering Ltd., said the facility became dormant in 2015 after its main contractor, Addax Petroleum, declared a force majeure on its operations.

Simpson said some of the unutilised equipment in the facility included a Dive Support Vessel, Pipe Laying Vessel and an already constructed Jacket which could be used for oil and gas operations.

He said the facility when it was operational had 2,000 direct employees and 7,000 indirect employees which had direct impact on the host community and its environs. (NAN)

Oil & Gas

Why we are Recording Increased Oil Production – Edun

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The Federal Government says improved security in the Niger-Delta is responsible for the increased crude oil production to 1.65 million barrels per day as against the 1.25 million bpd previously recorded.

Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, stated this in Abuja at a Podcast hosted by Bruit Costaud in collaboration with Ballard Partners of U.

S.A.

Reports says the immediate past Minister of Information and Culture, Alhaji Lai Mohammed is the Managing Partner of Bruit Costard, a lobbyist and public relations firm and an affiliate of Ballard Partners.

According to Edun, the quickest way to get revenue for critical infrastructure is to shore up oil revenue.

“This is quickest way of giving the government the needed revenue to address our urgent needs.

“The government doesn’t have enough revenue for critical infrastructure and social services which are crucial to Nigerians now.

“The prices are still elevated and as you know in June 2023, the oil production and sales were roughly 1.25 million barrels per day.

“Now, it is up to 1.65 million barrels per day, that is one source of bringing in dollars and revenue into the government coffers that is non-inflationary,’’ Edun said.

Edun added that non-oil revenue as well as revenues from taxation were also critical to government.

“If you know about Mr President’s antecedent, the first thing he did in Lagos as governor was to get hold of the revenue.

“What he did was to deploy digitisation.  He used the latest technology to block the leakages and to improve the efficiency of monitoring and collection.

This is exactly the same thing we are doing at the federal level now.

“The revenue of the Federal government has been totally revamped.

“There has been application of technology to ensure what is due to the federal government, particularly from its various revenue-earning arms,  agencies,  companies, and enterprises is not taken,’’ he said.

The minister said that plans were ongoing to give incentives to small, medium and larger businesses. (NAN)

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Oil & Gas

Dangote Petroleum Refinery Begins Production of Diesel, Aviation Fuel – Official

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Dangote Petroleum Refinery has commenced production of diesel and aviation fuel.

Mr Anthony Chiejina, Group Head, Corporate Communications, Dangote Group, confirmed this in a statement to newsmen in Lagos.

Chiejina quoted the President of Dangote Group, Alhaji Aliko Dangote, to have elatedly thanked President Bola Ahmed Tinubu for his support, encouragement and thoughtful advice towards the actualisation of this project.

Dangote also thanked the Nigerian National Petroleum Company Ltd.

, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigerians for their support and belief in the historic project.

According to him, “We thank President Tinubu for his support and for making our dream come true.

“This production, as witnessed today, would not have been possible without his visionary leadership and prompt attention to details.

“His intervention at various stages cleared all impediments, thereby accelerating the actualisation of the project.

“We also thank the NNPCL, NUPRC and NMDPRA for their support.

“These organisations have been our dependable partners in this historic journey.

“We also thank Nigerians for their belief and support in this project,” he said.

Dangote said: “We have started the production of diesel and aviation fuel, and the products will be in the market before the end of the month.

“This is a big day for Nigeria. We are delighted to have reached this significant milestone.

“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects.

“This is a game changer for our country, and I am very fulfilled with the actualisation of this project.

“The refinery has so far received six million barrels of crude oil at its two SPMs located 25 kilometres from the shore.

“The first crude delivery was done on Dec. 12, 2023, and the 6th cargo was delivered on Jan. 8, 2024,” he added.

He said that the refinery can load 2,900 trucks a day at its truck-loading gantries.

He added that the products from the refinery will conform to Euro V specifications.

Dangote boss said that the refinery design complies with the World Bank, US EPA, European emission norms, and Department of Petroleum Resources (DPR) emission/effluent norms. State-of-the-art technology.

“I must extend our sincere appreciation to our Bankers and financiers, both local and offshore, who demonstrated a great deal of patience, in seeing us through many difficult times.

“In the same vein, we thank the Government of Lagos State, under the leadership of Babajide Sanwo-Olu, who has been incredibly proactive in ensuring that the many challenges we encountered in the course of executing this project were quickly resolved.

“I thank him immensely.

“I also sincerely thank our host communities and their traditional leaders for their sustained patience, forbearance, and admirable willingness to work with us to find amicable and win-win resolutions to the many issues we have had to deal with as the construction of this huge facility progressed.

“Our staff have also contributed so immensely to the success of this project. I thank them profusely,” Dangote added.(NAN)

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Refinery Rehab: Don’t Expect Immediate PMS Price Crash, Experts Tell Nigerians

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Some Oil and Gas Experts have said that the coming on stream of both Port Harcourt and Dangote refineries may lead to some marginal reduction in the cost of petroleum products and not a significant price crash.

The experts made this known in an interview on Sunday in Abuja.

According to them, some ancillary costs such as freight and port charges, among others would have been eliminated to achieve the marginal reduction.

The Federal Government had on Dec.

21, announced the mechanical completion and flare start-up of the Port Hacourt Refining Company Limited (PHRC) and the subsequent streaming of its phase two in 2024.

This, according to the Minister of State Petroleum (Oil), Sen.

Heineken Lokpobiri, will herald the commencement of the production of petroleum products after the Christmas break.

The PHRC comprised of two refining units, with the old plant having a refining capacity of 60,000 barrels per day (bpd) and the new plant 150,000 bpd, both summing up to 210,000 bpd.

Reacting to the development, an Associate Professor of Energy and Natural Resources, University of Abuja, Olanrewaju Aladeitan, said there should be some marginal reduction in petrol prices as some ancillary cost would have been eliminated.

However, he explained that the price of petroleum products may not come down significantly as to describe it as crashing.

“The price may not come down significantly considering the fact that crude oil and condensates supply for the domestic market under the Petroleum Industry Act is going to be based on a willing supplier and a willing buyer basis.

“And the fact that the supply of crude oil will be commercially negotiated having regard to prevailing international market price for similar grades of crude,” he said.

With this provision, he said there would be no dedicated percentage of crude for local refineries.

“Hence international market price which of course is denominated in dollars will still be the determinant of cost of the crude oil that would be refined.

“So I do not see how the price of Petroleum products will crash,” Aladeitan said.

Also speaking, Mr Yushau Aliyu, an Economic Expert, said reaching to a mechanical test of the refinery after a very long fruitless effort was an indication that part of our refined Premium Motor Spirit (PMS) deficit would be attended.

Aliyu described it as a good signal of recovering in the forex deficit which dominated the dwindling liquidity crisis.

“In addition, the new Nigerian National Petroleum Company Limited (NNPC Ltd.) is responding to the immediate solution for availability of PMS in the economy.

“We are expecting the NNPC Ltd.’s retail stations to reduce their pump price due to absence of landing cost in the short term effects,” he said.

Another oil and gas expert who preferred to remain anonymous said it was obvious that some people in the oil and gas sector were engaged in an act of sabotage.

He frowned at the situation where the government preferred to spend so much, including foreign currency, to import fuel, rather than fix it refineries.

“They claim that the 60,000 barrels capacity refinery in Port Harcourt is back on stream, while the 150,000 barrels capacity will work soon.

“We are waiting to see them work, including that of Warri and Kaduna. When they are put to use, let’s see why fuel prices will not crash,” the expert said.

NAN reports that pump price of PMS has increased to N660 per litre at various fuel stations, while NNPC Ltd.’s retail outlets sell at N617 since the removal of subsidy in May 2023 due to high crude cost and high foreign exchange rate.

The after effect of the removal and high cost of fuel brought untold hardship and suffering on Nigerians due to inflation, increase in goods and services, among others. (NAN)

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