Oil
Nigeria’s refineries to be in full capacity by March 2016-Kachikwu
…says fuel importation to continue
By Yemie ADEOYE
KADUNA-MINISTER of State for Petroleum resources and Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu has assured Nigerians that all the nations refineries in Warri, Portharcourt and Kaduna will be in full production capacity by March, 2016.
This is coming on the heels of his announcement that Nigeria will continue to import fuel in 2016 and beyond even as the nations refineries begin to come back fully on stream.
According to him, Kaduna is already producing about 1.5 million litres a day, while Port Harcourt will commence production of about 2 million litres a by next week and Warri is expected to start early next year.
Kachikwu dropped the hint while speaking during his scheduled visit to the Kaduna Refinery and Petrochemical Company. “We are still going to be importing, even if you are in hundred percent capacity production of about 445,000 barrels capacity for the plant you will still be doing less than 2 million litres, consumption is even at best with all we have done it is still 50 percent.
“So until we begin to get individuals who can co-relocate new refineries within the premises of existing refineries to expand the capacity, that’s the best way to go. And that is the only way we are going to be committed to it.
“We are looking for investors who have the capacity, the speed and the time to be able to accomplish on that. But until we do that, we are going to be doing a mixture.
“Best case situation is a twenty five to forty percent of local production and the rest being imported, worst case situation is what we have seen in the last few months of hundred percent importation.”
The minister also said that he directed the refineries to look at the commercial view of their plants in order to use every arm of the refinery to generate profit.
“A typical refinery will look at their lubes, the petrochemical areas, will look at their power areas and see how they can probably expand the value chain and the potentials, that’s certainly what we are looking at,” Kachikwu explained.
He expressed confidence that the queues in the filling station will end in next two weeks, noting: “Some of these factors are not in anybody’s control, one of the thing I want people to understand is that NNPC is not setup to be a hundred percent importer for the country.
“We are a last intervention force, that is what we are and this business should be run by marketers who make money out of it, bringing their products, selling their stations. It is not the business of NNPC really to be providing them hundred percent capacity but because there was over one year delay in payment subsidy.
“Because of the excess challenges that marketers have had, NNPC has had to ramp up on the 40 percent to about 80 percent capacity right now. And with that comes also the responsibility in terms of distribution, in terms of clearing and other related issues.
“And bad pipelines are not exactly helping matters; so it has been a huge amount of work we have had to do in the last nine weeks just keeping people on the roads. I personally never had window of three hours to sleep over that period. Now we have been able to clear some of them but there is still a lot more work to be done.”
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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