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The Federal Government is set to revoke the refinery licenses issued to some private investors but are yet to do any tangible work with them just as it is appealing to the international oil companies to establish signature refineries in the country.
The Minister of States for Petroleum, Emmanuel Ibe Kachikwu confirmed this in an interview he granted journalists on the side line of the Petroleum Technology Association of Nigeria (PETAN) organized investors forum at the ongoing Offshore Technology Conference (OTC), holding in Houston, Texas, United States of America. He noted that investors cannot just be holding the licenses without doing anything with them.
They must do something with them, he said.
“I have asked the DPR to review the refinery license and withdraw those not being used,” he said.
He also lamented the inability of international oil companies operating in the country and yet refused to have what he described as signature refineries.
The Minister said that the Department of Petroleum Resources (DPR) has been directed to revoke the licenses of those that have failed to utilize them while another new set of license would be given to new investors that are serious.
“I have asked the DPR to review the refinery license and withdraw those not being used”, he said.
But some of the downstream operators that spoke to BusinessDay shortly after the conference said that there is no enabling environment yet to establish refineries because the downstream sector of the petroleum industry is still regulated.
The operators who spoke to BusinessDay on the condition that their names should not be mentioned said those that got the licenses would have love to put in place a refineries if there is a complete deregulation of the downstream.
According to the minister the existing refineries are currently producing about seven million litres of Premium Motor Spirit (PMS) or Petrol and that the government is doing everything it can to increase e their capacities adding that refining is a major focus area of the government.
He stated that efforts are being made to bring private investors that would be able to recoup their investment within a short period to become stakeholders in the refineries.
Nigeria he said would opt out of importations of refined products very soon.He said by September this year the government would have signed up repairs terms for refineries and this would enable them to increase their outputs in the nearest future.
He desire to boost refining capacities is what has led to the government to encouraging Modular Refineries and co-location of refineries along with the existing ones. Each state in the Niger Delta region would have a modular refinery with private sector driving the operations while the state government would provide the land.
He said given the price instability the industry is still facing he believes the extension of production cut by OPEC member is ideal. He said he would work with his colleaques in OPEC to work towards the extension of the production cut for another six months. “ The indications I have regarding this is that there are lots of willingness among OPEC members to extend the production cut. But we still need to engage Russia, Mexico and the rest to continue to be as vibrant as others in terms of compliance.”
Commenting on the actual crude oil production by the country, he said, is traditionally referred to be producing 2.2 million on daily basis is often claimed but in the actual sense the country is currently producing about 1.8 million which is the basis the OPEC exempted the country from production cut.
Speaking on his projection for oil production in the country in the next one year , he said:“A year from now the country would certainly be looking above the numbers that are currently existing which is 2.2 million barrels. But again let me step back, traditionally Nigeria is always given this number of 2.2 million barrels but some things like condensate which is 300,000 barrels per day and some flits of gas are actually added to make it 2.2 million barrels a day.
He said in five years from now he want to see how the country can target three million barrels per day and this is going to depend on issue around OPEC, Prices and investments.
1.8 barrels which is bases Nigeria was exempted.
