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NIGERIAN CRUDE OIL AND GAS.
Nigeria plans new green field refinery
The Federal Government of Nigeria and its partners in the upstream oil
and gas industry are working out modalities for the construction of a
200,000 bpd Greenfield refinery which is expected to come on-stream
within the next three years.
But its earlier target of 40bn barrels of crude oil reserves by the end
of the decade is no longer feasible owing to several constraints,
according to Dr Funsho Kupolokun, Group Managing Director of the
Nigerian National Petroleum Corporation (NNPC). Speaking at the opening
of the 2007 annual international conference and exhibition in Abuja, Dr
Kupolokun said the corporation was syndicating two Greenfield refineries
working in conjunction with its joint venture partners.
Although he did not put a time frame on when the refineries would come
on-stream, investigations revealed that owing to pressure from the
Presidency, the corporation expects the plant to be ready by 2010. He
said the financial details were still being worked out by the five
multinational companies involved in the refinery project. These are
Shell, ExxonMobil, Chevron, Total and Agip and reiterated that the
corporation was working hard to come up with a regulation to compel
every producer to refine a certain percentage of their production.
He noted that earlier directives that 50 % of production be refined
locally failed because they were not backed by legislation, adding:
“When the regulation comes, they cannot give excuses.”
Kupolokun recalled that the Port Harcourt, Warri and Kaduna refineries
(all subsidiaries of the Corporation) had been working at 85, 70 and 75
% installed capacities before the Chanomi Creek pipeline was vandalized
and pledged that efforts were on to restore capacity. However, he said
owing to the situation in the Niger Delta, the NNPC could not find a
contractor to go and effect repairs on the Chanomi Creek Channel
pipeline. The Chanomi Creek Channel pipeline provides crude oil
feed-stock for the Warri and Kaduna refineries.
The Group Managing Director said to grow and become one of the 20
largest economies in the world, Nigeria must boost its fuel consumption
from 30 mm liters per day to 100 mm liters per day within the next 20
years.
“To become one of the top 20, we need to grow the Gross Domestic Product
by 10 % annually, and this will involve enormous energy requirement.
This is because the GDP has a relationship with energy consumption. From
1995 to 2005, consumption of products rose by 6.4 %.”
“In view of the new target, Premium Motor Spirit (petrol) will grow from
30 mm bpd to 100 mm bpd. Gas will rise from 5bn cfpd to 20bn cfpd,” he
said.
He said although Nigeria has tremendous crude oil and gas capacity, it
has only grown production by 5 % per annum over the last 10 years. He
named factors militating against the possibility of achieving the 40 bn
barrels target to include the cycle of violence in the Niger Delta,
rising cost of operations and funding constraints.
“To achieve the 40bn barrels reserves mark, we need to make three giant
finds each the size of Bonga in the next three years.”
Vice President Goodluck Jonathan while declaring the 2007 annual
international conference and exhibition open said government was looking
forward to a time when Nigerian content would account for 70 % of oil
industry input.
He said government would come up with stronger legislation to support
Nigerian content, adding that while efforts at the federal level was on
to address the situation in the Niger Delta, the states and local
governments in the area must come alive to their responsibilities.
