[ad_1]


Operators believe that Nigeria’s oil and gas sector has fared badly over the past eight years despite being under the watch of an outgoing President, who doubles as the Minister of Petroleum Resources, OKECHUKWU NNODIM writes
The dormancy of Nigeria’s refineries despite several Turn Around Maintenance exercises, massive crude oil theft, and incessant scarcity of Premium Motor Spirit, popularly called petrol, among others, in the past eight years, have blighted the performance of the current government in the oil and gas sector.
Irrespective of the abundant deposits of hydrocarbons across the country, particularly in the Niger Delta, Nigeria has been struggling to get an adequate supply of refined petroleum products.
Operators told our correspondent that the emergence of Major General Muhammadu Buhari (retd.) as President in 2015, had raised the expectations of Nigerians, particularly after he (Buhari) decided to head the Federal Ministry of Petroleum Resources as minister.
“Another reason why Muhammadu Buhari was voted into power by Nigerians had to do with his past pedigree in the petroleum sector. Also, in this regime, he assumed office as a senior Minister of Petroleum Resources, because throughout his regime we only had a junior petroleum minister,” the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Ukadike Chinedu, stated.
He added, “So, he (Buhari) served as petroleum minister and President of Nigeria. Therefore, the responsibility of ensuring that the reforms in the oil and gas sector are achieved doesn’t have a second chance, because he is the President and minister.
“I don’t think there will be anything inhibiting him from trying to implement and ensure that the policies of the Ministry of Petroleum Resources saw the light of day.”
But despite holding such strategic positions, the oil and gas sector recorded little achievements during the first and second tenures of Buhari, who is to hand over to the President-elect, Bola Tinubu, on May 29, 2023.
Dormant refineries
Nigeria has four refineries under the management of the Nigerian National Petroleum Company Limited. They include the Port Harcourt Refining Company (two plants), Kaduna Refining and Petrochemical Company, as well as the Warri Refining and Petrochemical Company.
The government is currently working on the Port Harcourt and Warri refineries, with promises that the PHRC would begin operations this year.
It had made several such promises in the past, after spending billions of naira on Turn Around Maintenance of the refineries. But despite these promises and heavy capital outlay, the refineries had failed to refine crude since Buhari became the President in 2015.
“I remember that in one of my interviews, I encouraged the President to declare a state of emergency in the refineries, so as to ensure that our four refineries in Nigeria begin to work. Nigeria is heavily dependent on the importation of petroleum products.
“You will also agree with me that petroleum products drive the economic activities of this country and any little increase in petroleum product prices leads to galloping inflation, which ultimately affects domestic production and the prices of goods.
“The President, in the next few days to the end of his tenure, would have delivered to Nigerians four working refineries by virtue of being the petroleum minister and President of Nigeria and this issue of fuel subsidy and petrol imports would have come to an end,” Ukadike stated.
The IPMAN official stated that unfortunately under the Buhari regime, Nigeria spent trillions of naira on fuel subsidy, billions of naira on logistics, etc., because of the dormancy of refineries.
He said, “It is very unfortunate for a country under the watch and eyes of the Minister of Petroleum, who is also the President, not to be able to deliver at least one refinery after eight years.
“It is even under his watch that we lost most of these refineries. It was under his watch that we lost the Kaduna refinery, which was producing to some extent before he came on board. The Port Harcourt refinery was gone during his watch. Warri went off during his watch.
“This is not a sound record and this issue caused the naira to suffer heavily because we now have so much naira pursuing a few dollars for the importation of petroleum products.”
Also commenting on the development, the President of Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, told our correspondent that PETROAN had repeatedly asked the government to partner with oil dealers in revamping the refineries.
“But this has not yielded the desired results and we can see how our refineries have been dormant for decades. A country that produces crude oil but exports it to other countries for it to be refined and shipped back as refined products. This is sad and has to stop,” he stated.
Oil theft
Nigeria also witnessed massive oil theft under the regime of Buhari, a development that led to revenue losses and a drop in investments.
The theft grew worse between 2021 and 2022, to the point that Nigeria’s oil production crashed below one million barrels per day in August last year, which was the lowest ever in several years.
An analysis of production figures obtained from the Nigerian Upstream Petroleum Regulatory Commission indicated that from January, February, March and April 2022, for instance, the country’s crude oil production (without condensates) were 1.39mbpd, 1.26mbpd, 1.24mbpd and 1.22mbpd respectively.
In May, June and July 2022, the figures were 1.02mbpd, 1.16mbpd and 1.08mbpd respectively. But this dropped below 1mbpd in August to 0.97mbpd.
The Chief Executive of NUPRC, Gbenga Komolafe, had stated in October 2022, that most international oil companies operating in Nigeria were to divest from onshore oil and gas assets due to poor earnings caused by the massive crude oil theft across the country.
“Fundamentally, it is important to note that within the next few years, most IOCs shall divest from onshore oil and gas assets due to poor return on investment as a result of crude oil theft and this may pose a threat to job security,” Komolafe, had stated in Abuja.
He, however, recently pointed out that efforts by the Federal Government and its security agencies paid off, and led to growth in oil output between September 2022 and February 2023.
The PRIMANEWS exclusively reported recently that Nigeria’s crude oil output dropped by 38,102 barrels per day in March, translating to a cumulative loss of about 1,181,162 barrels, and signalled the first plunge in oil production in seven months.
The drop grew worse, as it plunged by 269,600 per day in April when compared to what was recorded in the preceding month.
Nigeria’s oil production had been on the rise since September 2022, following concerted efforts by the Federal Government and stakeholders to curb oil theft in the sector.
The rise in oil output was, however, not sustained in March, as figures from the NUPRC showed that while the country pumped 1,306,304 barrels of crude daily in February, the volume dropped to 1,268,202 barrels per day in March and further went down to 998,602 barrels per day in April.
“That is a very dangerous signal of trouble that is coming. This is because we thought that with what the Tompolo team is doing, we should be approaching about two million barrels of crude oil production per day.
“So, if the volume of reduction per day is this frightening, then it is something that calls for urgent investigation. If we have dropped from over 1.3 million barrels per day to about 900,000 barrels per day, that is already about 400,000 barrels that is lost daily and it is a very negative and bad trend for Nigeria.
“It portends an economic downturn that could be drastic if the situation continues. However, I believe that with all of these new oil discoveries in Nasarawa and Bauchi, and production commencing, there may be a positive change,” the PETROAN president stated.
Gillis-Harry said Nigeria should be talking about how to grow its oil production and not about how its fortunes were dwindling.
“Our security personnel down to the production sector, including the NNPCL and everybody, should have their hands on deck. Because this two-month consecutive drop is a very dangerous trend, especially since we have engaged a private security outfit to also help with this oil situation,” he stated.
Petroleum Industry Act
The passage of the Petroleum Industry Act in August 2021 was named the major achievement of the Buhari regime in the oil sector. The Petroleum Industry Bill dragged on for about two decades before it was passed into law by Buhari two years ago.
“I must say that the government that is winding up has tried, but nevertheless, there are some pitfalls. However, the PIA that we have now has given us a lot of impetus on how we can deal in the oil and gas sector.
“I think if it is strictly followed, it will bring in investors that will deepen the oil and gas utilisation in this country, and also unleash wealth, moving forward,” the National President of IPMAN, Chinedu Okonkwo, stated.
Also speaking on the PIA, the Executive Secretary of the Major Oil Marketers Association of Nigeria, Clement Isong, however, stated that despite enacting the law, the government had failed to implement it as desired.
“When you go ahead and write the law and then you do not implement it, then there is an issue of trust. People cannot trust the state, they cannot trust the government to implement the law. The law has been written but we are not implementing it.
“So why would you expect anybody, domestic or foreign, to bring his capital to invest in your economy when you can go as far as pass a law and you don’t implement it?” he queried.
Fuel scarcity, pipeline vandalism
The current regime of Buhari has also been characterised by incessant cases of fuel scarcity and repeated vandalism of both crude oil and gas pipelines.
“We have experienced so many cases of fuel scarcity under the Buhari government. It was under Buhari’s watch that ethanol was imported into this country as petrol, distributed and damaged the vehicles of so many people.
“Nobody was held accountable for that until this minute. Everybody denied it and marketers suffered humongous losses, all within the period of this administration. It was also under this same regime that Nigerians bought petrol for as high as N500/litre at filling stations due to its scarcity.
“We have oil here, we have refineries and we keep sending our crude to another country to purify so that they will give us finished products with our own raw materials. It is unimaginable. It is crazy! Also, our pipelines are being vandalised despite the many security outfits in Nigeria” the IPMAN PRO, Ukadike, stated.

[ad_2]