Oil
NNPC to cut crude oil refining costs
ABUJA-THE Nigerian National Petroleum Corporation is looking at significantly reducing the cost of refining crude oil within the c
Ibe KACHIKWU
ountry through resource co-location.
With the co-location model, the corporation will ensure that new refineries are situated together in clusters, which will allow for sharing of critical infrastructure like power, pipelines and technologies, among other resources.
This model, our correspondent learnt, was at the proposal state, and was targeted at encouraging the private sector to invest in refineries. Currently, over 440,000 barrels of crude oil are meant for local refining, but a large proportion of this quantum is unutilised because of the near-comatose state of the refineries, except for Port Harcourt plant which has shown some level of improvement in recent times.
The Group Managing Director, NNPC, Dr. Ibe Kachikwu said in an interview that the co-location model for new refineries was feasible and had the capacity to drive efficiency in the midstream segment of the petroleum industry, especially in the area of crude refining.
He said the corporation was open to Nigerians willing to key into the model and give the petroleum sector a lift.
“The co-location model for the refineries is actually a proposal. I will like a situation where we will deal with our own existing refineries and then find individuals who are willing and ready to invest in other refineries,” he said.
Speaking on how the model would work, Kachikwu explained, “In a co-located area, they (refineries) share common tanks, common pipelines, common power, and this will obviously bring down the cost of building refineries, and the effect of that is, if they are sharing technical skills and management together, there would be huge cost efficiency.
“We have to do our marketing very well and get people who are willing to do this.”
In the interim, he said the hope of the NNPC was to get the existing refineries to work, saying that the model all over the world today was that the value obtainable from crude was at the upper level of the value chain.
The NNPC GMD stated, “To produce crude, there is no much technologies to be deployed as crude is the same everywhere. The only time you get an incremental value in terms of pricing is when you refine.
“Crude is cheap, and you need to refine to make some quick returns. There is the need for us to expand our refineries and grow more refineries and ship out refined products to the rest of Africa because there is a lot of market for them.
“Unfortunately, ours haven’t really worked and we need to get them to work.”
The NNPC had last month said with respect to the new refineries, its role would be limited to providing the required space for their operations.
Kachikwu was quoted to have said, “I am pushing to build new refineries next to our existing plants in order to boost the nation’s refining capacity for the common good.
“The new refineries will be developed by private investors and NNPC’s role will be just to provide them with space close to the existing refineries to enable them share key facilities such as pipelines and storage facilities.”
The GMD pointed out that though the current challenges militating against the operations of the refineries were huge, they were not insurmountable.
He also praised the vision and foresight of past Nigerian leaders for establishing the refineries and challenged the present generation to sustain the vision, adding that all hands must be on deck to salvage the situation.
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.
Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones
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.”
Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy
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.
I Make $40,000 Montly With Content Creation Says Blessing CEO
Senator Ifeanyi Ubah Laid To Rest In Nnewi Amidst Tight Security
Tinubu Moves To Transform Tragedy To Prosperity With Livestock Investment
Nicki Minaj Teams Up With Davido On ‘The Pink Print’ Anniversary
Simon Ekpa’s Arrest Will Restore Peace In South East, Says Enugu Gov’t
Wizkid’s “Morayo”: Critics, Fans Clash Over Album’s Quality
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
