‘No Nation Develops Without Robust Infrastructural, Industrial Base’

05 Jan 2013

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Dr. John Erinne


When the President, National Society of Chemical Engineers (NSChE), Dr. John Erinne, called for a media parley recently, one thing was clear. He meant to intensify calls on the Federal Government to reverse the de-industrialisation of the country as well as boost the nation’s petrochemical sector.

According to Erinne, “cognisant of the fact that no nation can truly develop without a robust infrastructural and industrial/manufacturing base, there is a need to re-focus attention on the creative role of chemical engineering in these areas.”

The NSChE, as a division of the Nigerian Society of Engineers (NSE), seeks to promote the practice of chemical engineering for national development and to enhance the usefulness of the profession to the public and to cater for the interest of chemical engineers in Nigeria.

He said, “current efforts to reform the power sector and improve electricity supply should be sustained, if the de-industrialisation of Nigeria is to be halted.” Next to power, he listed high cost and access to funds as difficulties believed to be the highest impediments to manufacturing.

He therefore said urgent reforms to make funding more readily accessible and at reasonable cost to industrialists is called for, adding that import tariffs, which disadvantage local manufacturers, but favour importers should be reviewed to restore incentive for local manufacturing.

Erinne also said efforts to develop local raw materials should be reinvigorated and accorded greater priority as well as investment promotion and targeted intervention in key sectors like sugar, cassava, pulp/paper and solvent sectors.

Speaking on the role of chemical engineers, he said it cannot be over-emphasised, as it is perceived as almost unanimous with the oil and gas industry in Nigeria. “Chemical engineering is indeed a prime driver in the Chemical Process Industry Sector, which is essentially involved in processing and conversion of many primary materials (agricultural, mineral, chemical) into vitally required intermediate and end products (e.g. cement, paper, sugar, flour, fertilisers, soaps/detergents, starch, paints, vegetable oils, beverages and solvents amongst others).

“It is also involved in provision of public infrastructure in such areas as water supply, waste disposal, energy conversion systems and environmental protection. Therefore as a spin off from our Vision 2020, we are indeed strongly focused on positioning the society and our profession to contribute maximally towards the advancement of Nigeria and to sustain the position of chemical engineering as one of the most respected professions in the country,” he said.

Erinne said efforts are being made to extend the society’s hands of fellowship internationally. Accordingly, he said relationship has been established with the National Organisation for Professional Advancement of Black Chemists and Chemical Engineers (NOBCChE) of USA. Similar relationships, he added, are being discussed with the American Institute of Chemical Engineers (AIChE) and the South African Institution of Chemical Engineers (SAIChE). “It is indeed hoped that relationship with AIChE will ultimately lead to an African Chemical Engineering Forum.”

On the key policy positions of the society, he listed the downstream oil and gas sector as one of the areas the government should divest majority shareholding in the three existing Nigerian National Petroleum Corporation (NNPC) refineries in Port Harcourt, Warri and Kaduna to competent private sector investors with strong technical and financial capabilities and proven track record in petroleum refining, in order to meaningfully restore them to an acceptable performance level.

He also advocated that the proposed 350,000 bbls/day refinery in Lekki, Lagos, should be implemented as a matter of urgency in order to ensure adequate refining capacity to meet growing demand for petroleum products in the country. The other proposed refineries for Bayelsa and Kogi should also be explored subsequently, he added.

If these stringent measures are taken, he said Nigeria indeed has the potentials of becoming a regional Petroleum Refining hub in West Africa and a net exporter of petroleum products in the next seven years with consistent commitment to these remedial measures. He further advocated that the Pipelines and Product Marketing Company (PPMC), the Strategic Business Unit (SBU) of NNPC responsible for the network of pipelines and infrastructure for supply of crude oil to the refineries and distribution of petroleum products nationwide, should be excised from NNPC.

Accordingly, he noted that it should be transformed into a new holding company, which should act commercially and should be mandated to concession various aspects of its operations to competent private sector operators under clearly defined terms. On deregulation, he noted that the petroleum products market should be deregulated in order to create incentive for investment in the industry as such deregulation must be seen to support local refining and not encourage continued reliance on imports.

This, he said, must be done with the proviso that government simultaneously pays attention to the concerns of the populace in areas of establishing palliative measures to cushion the consequent effect on the most vulnerable segments of society, as this would reduce waste and profligacy in governance as well as tackle corruption in government.

Speaking on the position of the society on the gas sector, he said the NSChE commends the Gas Master plan and Gas Revolution as veritable policy instruments for positively impacting on our national economy by emphasising the use of our abundant natural gas to develop and improve the power sector and to stimulate local manufacturing.

He however lamented that almost five years after the unveiling of the Gas Master plan and nearly two years after the Gas Revolution, there has been very little progress. Necessary measures he said should therefore be put in place to remove all obstacles to the inflow of investments into the sector in order to actualise these laudable plans.

In particular, he said gas tariffs must be reasonable and competitive to attract the much-desired investments in the gas sector. “The proposed Petrochemicals Corridor in the Niger Delta Area should be implemented urgently as a vital contribution by government, in order to stimulate investment by the private sector in giant petrochemical plants.

“Similar to petroleum refining, NSChE believes that Nigeria should be a major regional petrochemical hub in less than 10 years if these meaningful policies are faithfully implemented.” He said a deliberate programme to promote the use of LPG as convenient and the Federal Government should spearhead alternative domestic and industrial fuel. Such programmes he disclosed have been implemented in Indonesia, India, Brazil and Colombia with very gainful results. “There is no reason why it should not succeed in Nigeria. At less than 1.0kg per capita consumption of LPG in Nigeria, as against a West African average of over 5.0 kg per capita, the potential for LPG growth in Nigeria is evidently huge,” he added.

There is no gainsaying that the Petroleum Industry Bill (PIB) has continued to generate controversy despite concerted efforts to settle it. Proffering the way out, Erinne said the National Assembly and Federal Government should as a matter of urgency, accord priority to the bill with a view to enacting it into law in the shortest possible time.

He however said the society does not support the proposal for retention of the Ministry of Petroleum Resources in parallel with a new Petroleum Technical Bureau (PTB), which will essentially serve as the Minister’s Secretariat. Rather, he proposed a National Petroleum Directorate, which will combine both roles more efficiently.

The society, he added, does not support the creation of two regulatory bodies in the oil and gas industry. “We strongly recommend a single, robust regulatory agency for the industry.  Also, the current R&D Division of NNPC should be constituted into an independent Petroleum Research Centre, strengthened to carry our research in all aspects of the Nigerian oil and gas industry.

“Given the vital importance of research and development in the development of nations, we indeed find it curious that the PIB made no mention of this at all.  We are also uncomfortable with the failure of the PIB to provide for a clear mechanism for overcoming the current JV cash call problems in the Upstream Sector. Urgent studies are required to fashion out a new workable model acceptable to all stakeholders.

“The proposal to metre oil production at the wellheads is not technically feasible. Production from wellheads includes water, dissolved gas, sand and other contaminants. Such metering will therefore not accurately measure oil production. Besides, coordinating and monitoring metre stations at thousands of wellheads in the oilfields will simply be a nightmare.”

Tags: Nigeria, Featured, Business, John Erinne

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