On behalf of the Independent Petroleum Producers Group (IPPG), I am honoured and extremely delighted to stand before you today to deliver the opening remarks at this inaugural summit of the Crude Oil Refinery Owners Association of Nigeria (CORAN).
As the Chairman of IPPG and Waltersmith Refinery & Petrochemical Company, my role here this morning would certainly entail a delicate balancing act.
- The summit theme, “Making Nigeria a Net Exporter of Petroleum Products” not only resonates deeply with our collective aspirations as a nation but demonstrates our determination to harness our abundant hydrocarbon resources for the benefit of all Nigerians. As we gather here today, it is therefore important we take this opportunity to chart a bold course for Nigeria’s future in the global energy landscape.
- I must begin by applauding the government’s new policy initiatives to transform the domestic refining sector for maximum socio-economic impact on our country. These policies are already laying a solid foundation for an enduring and sustainable strategy of making Nigeria a net exporter of petroleum products and ultimately a global energy
leader.
- The long-term aspiration of making Nigeria a net exporter of refined petroleum products is reality whose time has come with the private sector now fully leading the charge in the refining sector. At this juncture, I must recognise and specially commend
Alhaji Aliko Dangote GCON, for moving us closer to this aspiration of a net exporter of petroleum products with the operational commencement of the game-changing and transformative Dangote Refinery. Also, I must commend other members of CORAN for their visionary and entrepreneurial spirit and working assiduously towards the goal of making Nigeria energy independent.
- For the current achievements recorded in the sector to endure, government policies across the following areas must be strengthened:
o Crude Supply: The implementation of the Domestic Crude Oil Supply
Obligation (DCSO) will serve as an avenue to guarantee availability and
reliability of feedstock for all domestic refineries from our upstream sector on a Willing Seller Willing Buyer basis in compliance with the Petroleum Industry Act (PIA). I therefore use this opportunity to commend the government and industry regulators – NUPRC and NMDPRA for their effort in diligently implementing the DCSO policy.
o Crude and Product Pricing: The recent presidential directive to NNPCL for sale of crude oil to all domestic refineries in Naira is a significant step in the right direction. By pricing allocated crude for domestic consumption in Naira, at a fixed exchange rate, guarantees that both the government and Nigerians benefit from petroleum products at the best possible value. This is a prime example of an innovative, business friendly and socio-economically impactfulpolicy that will spur national development. We need more initiatives like this!
o Petroleum Product Monitoring and Border Policing: Given the potential price difference that may arise, the in-country value retention drive shall be greatly enhanced through effective border controls and adoption of advanced technologies to check the illicit movement of petroleum products across our nation’s border as this poses a major threat to our aspiration. As a nation, we must put in place mechanisms that enhance the monitoring of our refined
The successful realisation of this aspiration will require creating synergies and viable linkages across the entire petroleum value chain. Thus, it is critical that our upstream sector is urgently repositioned to deliver and support this aspiration. Today, despite our world class and vast hydrocarbon resource base, our position is that of a net importer of crude oil as feedstock for our existing domestic refining capacity. The
current crude production of 1.35 million barrels per day continues to pose an existential threat to Nigeria’s socio-economic wellbeing and our ability to provide feedstock for our domestic refineries.
- Distinguished Ladies & Gentlemen, Nigeria should have no business importing crude oil to meet domestic refinery feedstock given the hydrocarbon resources at our disposal. It is for this reason IPPG has and will continue to clamour for steps aimed at addressing under-investment and unlocking the much-needed incremental crude oil
and gas production, specifically by: o Concluding all pending IOC divestment transactions, diligently and swiftly, to derive optimum value from these transactions for the sake of national interest.
o Enhancing security across the Niger Delta to ensure a conducive operating environment and stemming incidences of asset vandalism and unrest. o Upgrading and expanding industry infrastructure base to enhance efficiency and reliability of product supply to both the domestic and export market.
- Holistically addressing the above may unlock incremental production of 500,000 barrels of oil per day and 1.5 MMscf of gas per day in the short to medium term.
Ultimately, Nigeria’s domestic crude oil refining and petrochemical capacity must be sustained from our domestic crude oil and gas production in order to transform our country into a net exporter of refined petroleum and petrochemical products that will lay a strong foundation for the rapid industrialisation of the Nigerian economy
ensuring we are able to meet our export commitment to augment the much-needed foreign exchange earnings required for macro-economic stability.
- The emergence of Nigeria as a net exporter will require collaboration amongst industry stakeholders – policy makers, regulators and E & P and Refinery operators. The global energy landscape is evolving rapidly, and Nigeria must position itself at the forefront of these changes. Today’s summit is a pivotal step in this direction – the discussions we will have here will pave the way for strategies that ensure our refining sector is globally competitive and resilient.
- As IPPG, we appreciate that our members have a critical role to play in ensuring the realisation of this aspiration and as always, we stand ready to support the growth of the industry and remain committed to advancing Nigeria’s refining ambitions and ensuring that our industry not only survives but thrives on the global stage.
- I thank the organisers, under the leadership of the CORAN Chairman – Mr. Momoh Oyarekhua, for convening this inaugural summit. I wish you all a productive and engaging time during this summit and I very much look forward
Speech Delivered BY Abdulrazaq Isa, Chairman IPPG