•OPEC, others cut oil supply by 1.6bn barrels
Omololu Ogunmade, Emmanuel Addeh in Abuja, Peter Uzoho in Lagos and Amby Uneze in Owerri
The Nigerian National Petroleum Corporation (NNPC) yesterday assured President Muhammadu Buhari that his target to make Nigeria a net exporter of petrol would be achieved by 2023, promising that the country will begin the exportation of petroleum products with the West African sub-region.
The corporation’s Group Managing Director, Malam Mele Kyari, gave this assurance during the inauguration of the 5,000-barrel per day capacity Waltersmith Modular Refinery in Imo State by Buhari, who said the advent of such refineries in the country will aid the availability of petroleum products and eliminate importation.
This is coming as Nigeria and other participating oil-producing countries across the globe reduced global supply of crude oil by 1.6 billion barrels since May this year, the Organisation of Petroleum Exporting Countries (OPEC), has said.
Buhari, who inaugurated the refinery sited in Ibigwe, Imo State virtually, noted that the realisation of the refinery roadmap his administration launched in 2018, will lead the country to become a net exporter of petroleum products not only to the neighbouring countries but to the worldwide market.
The president also led the groundbreaking ceremony for phase two of the project to expand the capacity of the refinery to 50,000 barrels per day.
Buhari, according to a statement by his Special Adviser on Media and Publicity, Mr. Femi Adesina, said the establishment of modular refineries was one of the four key elements of his administration’s refinery roadmap rolled out in 2018.
According to him, the implementation of the initiative will make Nigeria a net exporter of petroleum products.
The president said the Waltersmith refinery came on stream barely two years after the launch of the modular refinery roadmap.
He added that the initiative came on board years after licences were issued for the establishment of modular refineries without any result.
Buhari said: “There is increased momentum in the other three focus areas under the roadmap covering the rehabilitation of existing refineries, co-location of new refineries and construction of Greenfield refineries.
”The realisation of the refinery roadmap will ultimately lead us to become a net exporter of petroleum products not only to our neighbouring countries but to the worldwide market. This modular refinery is the largest commissioned modular refinery in the country today.”
He praised the collaborative role of the federal government, through the Nigerian Content Development and Monitoring Board (NCDMB), with Waltersmith Refining and Petrochemical Company as novel in concept and superb in delivery.
The president described plans to commence the expansion of the capacity of the refinery to 50,000 barrels per day for the refining of crude oil and condensates as an integral part of the economic reforms that the country is undergoing.
The president who said he looked forward to seeing this new phase completed within the target time frame added that he has also directed the Ministry of Petroleum Resources, Department of Petroleum Resources (DPR), Nigerian National Petroleum Corporation (NNPC) and all relevant government agencies to support Waltersmith company to access crude oil and condensate feedstock for the timely delivery of the additional capacity.
He said in accordance with his administration’s agenda for jobs’ creation, he was glad that hundreds of direct and indirect jobs were created during the construction of the first phase of the project in addition to various business opportunities.
He expressed hope that the construction of the second phase of the project will create a bigger additional employment opportunities.
Buhari thanked the local community and the people of Imo State for hosting the refinery that will bring prosperity and economic development to the area.
The president commended the Ministry of Petroleum Resources; the Minister, Chief Timipre Sylva; the Chairman and members of the Governing Council and the management and staff of the Nigerian Content Development Board for making the public-private partnership a success.
He also commended the chairman, board, management and staff of Waltersmith Refining and Petrochemical Limited for their professionalism and focus on getting the project completed.
Governor Hope Uzodinma of Imo State and the Minister of State, Petroleum, cut the tape on behalf of the president at the event, which was also attended by the Executive Secretary, NCDMB, Mr. Simbi Wabote; and the Chairman of Waltersmith, Abdulrazaq Isa.
In his speech, Kyari said with small-scale refining facilities springing up in the country, the ongoing Dangote refinery and the rehabilitation of the country’s three plants, achieving the feat of becoming net exporter in two years was already in sight.
Kyari who called for more private partnerships in the refining business, said all the initiatives would come to fruition during the administration of President Muhammadu Buhari, whom he said had directed that all efforts must be geared towards deepening local refining capacity.
He said: “On your directive, Mr. President, you have said that we should deepen local refining and local production so that we become a net exporter of petroleum within a short time.
“This is within sight and it’s not a political date. By 2023, this country will be a net exporter of petroleum in very many fronts for many reasons.
“First, there are a number of initiatives that are going on like this one today. Many of them are approaching delivery, including the Dangote refinery, plus our own refineries and we will deliver them as promised. It will be done.
“There are additional initiatives, including modular refineries, small-scale refineries and Mr. President will see them within his tenure and ultimately the objective will be achieved.”
He explained that every litre of petroleum added to the Nigerian economy locally means that value is being added since it’s a reduction of the volume of product that would have been imported in the absence of local refining capacity.
“This is one of them which has incremental value and has the potential to deliver additional 45,000 barrels per day within record time.
“One key element of a refinery is to have the assurance of feedstock. We have engaged Waltersmith severally and we have assured them that we will make feedstock available to them as directed. NNPC will continue to collaborate with investors to establish more private refineries,” the GMD said.
According to him, although the country currently has the capacity to produce 2.5 million barrels per day, it is being constrained because of issues around production cuts.
Minister of State, Petroleum, Sylva, said in-country refining capacity would soon hit 250,000 barrels per day.
“This (inauguration) is coming to fruition of a major policy of the president: the development of local refining capacity.
“This is only the beginning. There are a lot of other refineries to be commissioned and we are hoping that very soon the in-country capacity to refine will be up to as much as 250,000 barrels per day.
“This marks a milestone in our quest to reduce imports which is in line with the policy direction of the current administration,” he said.
He said with deregulation, the downstream will sanitise itself, adding that Nigerians have already begun to welcome the benefits and are coming to terms with the new regime of deregulation.
Sylva stated that the government was committed to taking Nigeria back to when there was sufficient local production which was enough for Nigerians and aligned with the GMD on his position that Nigeria will soon become a net exporter of petroleum.
OPEC, others cut oil supply by 1.6bn barrels, Nigeria and other participating oil-producing countries across the globe have reduced the global supply of crude oil by 1.6 billion barrels since May this year, the Organisation of Petroleum Exporting Countries has said.
OPEC’s Secretary-General, Dr. Muhammad Barkindo, said, during a videoconference of the Crescent Ideas Forum with the theme, ‘The Outlook on Energy,’ the reduction in crude oil supply was taken in the interest of consumers, investors and the global economy.
“Since May, the production adjustments undertaken by the participating countries have helped to reduce the global supply by around 1.6 billion barrels, a truly impressive feat given the economic uncertainty overshadowing the industry.
“I would like to stress that these efforts were undertaken not just for the good of the DoC (Declaration of Cooperation) participating countries, but in the wider interests of consumers, investors and the global economy in general. There can be no recovery without market stability, and no one stands to benefit from volatility,” he stated.
In April, OPEC delivered an unprecedented response to an unparalleled market shock, by adjusting output down by 9.7 million barrels per day or roughly 10 per cent global demand at the time.
“These provisions stand out as a remarkable acknowledgement of both the commitment by these countries to support the market, and the scale of the challenge.
“There is no doubt in my mind that these decisive and proactive efforts helped put the oil market back on stable footing.
“In doing so, the DoC provided much-needed support to the global economy as it began to pick up steam in the third quarter of this year,” Barkindo added.
He said OPEC members began this year optimistic about the global economy and healthy oil market growth.
He stated that OPEC’s 2020 vision did not foresee the devastating impact of the coronavirus, the deadly toll it had taken across the world, nor the blow it had dealt with many economic sectors, especially crude oil.
“In 2021, we expect growth to bounce back to 6.2 million barrels per day, to just over 96 million barrels per day, compared to our pre-coronavirus expectations for demand reaching almost 102 million barrels per day next year,” he said.