Downstream sector: Deregulation will boost investment in refining – Kyari
By Ikenna Omeje
The Group Managing Director of Nigerian National Petroleum Corporation (NNPC) has said that the deregulation of the downstream sector of the oil and gas industry in Nigeria will increase investment in the refining business and facilitate exponential growth in the nation’s refining capacity.
Kyari stated this at the African Refiners Association (ARA) Week 2020 which held virtually with the theme: “Towards Cleaner Fuels for Cleaner Air,” a press release by the Group General Manager, Group Public Affairs Division of NNPC, Dr. Kennie Obateru, has said.
According to the release, the GMD who delivered a keynote address entitled, “Vision for the Downstream Sector on the Continent,” at the event, advocated deeper collaboration among downstream players across the African continent to provide solutions to challenges of substandard fuels.
Kyari said though the idea of price stabilization which led to the introduction of fuel subsidy in the 1970s was noble, it had grown into a huge financial burden on the nation’s treasury over the years, necessitating its removal in March 2020, stressing that the move will free up cash to fund infrastructural development, eliminate market distortion, and promote competition between operators.
He said increasing Africa’s refining capacity as well as quality of fuel required respective refineries to implement sustainable, coordinated pan-African solutions that would meet the target fuel specifications and thus protect the health and wellbeing of African nations and their citizenry.
“It is important to note at this point that the future of our continent does not just lie in our ability to unlock value from our vast natural resources or powering an industrial and economic revolution, but also in our ability to implement proven refining solutions that consider the broader public health implications of our business decisions,” the GMD stated.
Kyari who also spoke about the efforts the national company is making towards the rehabilitation of its refineries in Port Harcourt, Warri and Kaduna, said: “These projects will be in line with the AFRI standards of AFRI-4 specifications of 50 particles per million for diesel and 150 particles per million for gasoline by 2020, and AFRI-5 specification of 50 particles per million of sulphur in gasoline and diesel by 2030 respectively. Considering that revamp of petroleum products storage depots and associated pipelines is key to optimal operations of the refineries, the Corporation has decided to use a Build, Operate and Transfer (BOT) strategy to restore these facilities using private sector financing.”
The GMD who noted that Nigeria was intensifying the use of natural gas to ensure lower emissions, also disclosed that the outlook for the downstream sector both in Nigeria and across the African continent looks bright with attractive market conditions, and called on the refining professionals across the continent to utilize the abundant opportunities for strategic collaboration across the entire downstream value chain towards delivering value for the continent.
On his part, the release informed that the Executive Secretary of ARA, Engr. Anibor Kragha, applauded the NNPC for its efforts to bolster the continents’ refining capacity, assuring that the Association along with other stakeholders would support the Corporation to achieve its noble objectives.