By Obas Esiedesa
The Federal Government has asked International Oil Companies (IOCs) operating Nigeria to build refineries to process part of their crude oil in-country.
The government said that this would add value to Nigeriaa��s crude oil, create jobs and boost the economy.
At the opening of the inaugural edition of the Nigeria International Petroleum Summit (NIPS) in Abuja on Monday, President Muhammadu Buhari called on the IOCs and local investors to invest in the downstream sector of the countrya��s oil and gas industry.
The President said that Nigeria is open to private sector investment in the downstream industry and pursuing vigorously a programme for the rehabilitation of existing refineries so as to enhance capacity to supply locally refined petroleum products in Nigeria and West Africa.
In the past three months, Nigeria has been gripped by acute shortage of petrol which has resulted in long queues at filling stations nationwide.
Represented by the Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, Buhari said the summit was designed to be Africa’s largest and most important platform and linkage to the world where technological breakthroughs will be unveiled.
According to him, a�?NIPS is designed after the Offshore Technology Conference (OTC) in Houston and part of the objective is to deepen, enrich and provide leadership for Africa and make it one of the most important annual oil and gas events globally. It will potentially bring huge economic benefits, generate employment and expand businesses in Nigeria and Africaa�?.
He stressed the need to entrench transparency in the oil and gas industry, warning that corruption in any form will not be tolerated in the sector.
Buhari said: a�?On the ease of doing business, we will continue to ensure that all efforts in the petroleum sector and issues related to transparency, efficiency, enabling business environment and deploying new policies and regulations are strengthened so that investors will always feel at ease.
a�?Corruption in this industry must not be allowed in any form. On our part, we will not stop the fight until a new image is created where transparency will be the watchword in all our transactions.
a�?Our emphasis on gas investment is part of our efforts to achieve a cleaner economy that is gas based in alignment with the Paris Climate Change agreementa�?.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, at a breakout session, said that government may compel multinational oil companies in the near future to refine in Nigeria to ensure the country maximises its hydrocarbon resources and move away from just exporting crude oil.
He explained that Nigeriaa��s average in-country refining capacity was 14 per cent and would need to be upgraded to meet the demands of her rising population.
Kachikwu said: a�?We would get to a point where Nigeria, definitely, would be a major supplier of refined petroleum products. It just has to happen. Nothing else makes sense.
a�?We are also saying directly to oil companies that a time would also come when we would not be open to see them move around all the crude oil they produce in Nigeria.
a�?We will like to see integrated refining and integrated processing here. It gives us more jobs and creates more investmentsa�?.
The minister further explained that the challenges for oil companies has changed, noting that henceforth, oil has got to provide the resources to power the country, provide jobs for Nigerians and also provide the operational environment that is transparent enough for others to take Nigeria serious.
The session had in attendance the United States Ambassador to Nigeria, Mr. Stuart Symington; the Minister of Petroleum of Chad, Mr. Bechir Madet, as well as the Secretary-General of the International Energy Forum (IEF), Dr. Sun Xiansheng, amongst others.
Earlier, Kachikwu urged operators in the country to bring down the cost of production to make Nigeriaa��s crude oil competitive in the international market.
He said that a�?the reality is that today, if you cannot produce cheap oil, if you cannot diversify the processing of your oil; if you cannot look to internalising and externalising investment in the sector; if you cannot capture the requisite technological skills that are essential to help you operate efficiently, you are lost before you starta�?.
In his key note address that looked at 2018 outlook for the petroleum sector, the Secretary- General of Organisation of Petroleum Exporting Countries (OPEC), Mohammed Barkindo, said that the signs were encouraging.
He said that the compliance to the production cut agreement reached between the organisation of Petroleum Exporting Countries (OPEC) and non-OPEC nations has reached 130 per cent.
The Adamawa State-born OPEC scribe commended Nigeria for playing a leading role in achieving the production cut agreement that saw oil price rise to over $60 per barrel from $29 per barrel in January, 2016.
By Obas Esiedesa