By Ikenna Omeje
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that Nigeria has the potential to become Africa’s refining hub and net exporter of petroleum products.
Kyari stated this while delivering his goodwill message at the 2021 Nigeria International Petroleum Summit (NIPS), currently holding in Abuja, with the theme, “From Crisis to Opportunity: New approaches to the future of hydrocarbons.”
Nigeria presently imports virtually all the petroleum products used in the country, because of the moribund state of its refineries with combined capacity of 445,000 barrels per day.
However, there is hope that the country could increase its refining capacity to over 1,000,000 bpd with the private-owned 650,000 capacity Dangote refinery being built by Dangote Group, set to come on stream in Q1 2022, the ongoing rehabilitation of the Port Harcourt Refinery and Petrochemical, and construction of various modular refineries set to come on stream between 2022 and 2025.
The NNPC GMD noted that the vision of the national oil company hovers around becoming an integrated energy company with focus on increasing production and reserves, expanding the country’s gas sector footprints, enhancing local refining capacity, and ensuring energy security for the country.
“As a Corporate entity, our vision revolves on becoming integrated energy company focused on increasing production and reserves, expanding the nation’s gas sector footprints, enhancing local refining capacity and ensuring energy security for the nation. Indeed, Nigeria has potential to become Africa’s refining hub with the potential to becoming a net exporter of petroleum products,” he said.
According to Kyari, the outbreak of Covid-19 caused disruption, which led to demand destruction, supply shocks, revenue drops, global health and humanitarian crises, adding that NNPC is not immune to the global impact of the pandemic.
He, however, noted that oil and gas will play an important role in the energy mix in Africa, but the continent must adapt its strategies to the changing perspectives, address trust challenges and regulatory uncertainties as it creates value.
He said, “That is why I consider this year’s theme very apt in refocusing our minds on the task that lies ahead of us post recovery from the impact of COVID-19 and the crisis that shook our entire industry. Indeed, COVID-19 created an unpredictable situation: demand destruction, supply shocks, shrinking revenues, global health and humanitarian crises.
“Permit me to note that in NNPC, an organization I am so priviledged to lead, is not immune to the global impact of this pandemic and Africa’s Energy transition dilemma. However, future demand trends show oil and gas will still play a fundamental role in our energy mix as a continent but we must adapt our strategies to the changing perspectives, address trust challenges and regulatory uncertainties as we create value.”
Highlighting NNPC’s approach to the Future of Hydrocarbons, he said, “.. it is important to highlight a few areas of focus: exploration of frontier basins, the development of upstream gas fields and the financing of greenfield/brownfield additional production on de-risked assets, development of domestic and export gas projects: NLNG T7, AKK, Trans-Nigeria Gas Pipeline Project, the Gas Industrial Park as well as the Integrated Power Plants; rehabilitation of our existing refineries as well as the construction of greenfield condensate refineries; increased domestic gas utilization through LPG and CNG plants.
“Like so many businesses across the world, NNPC, has also taken a number of measures to diversify in non-oil and gas businesses: Renewables, healthcare, research, technology and Innovation, Telecommunications and Real Estate investment.
“Indeed, we recognize that as a Corporation and an industry, we must take advantage of the opportunities that the crisis and energy transition brings: business automation, process improvements, cost optimization, reducing our unit operating cost to $10 per barrel while keeping our obligation towards OPEC quota compliance, increased transparency in our operations and performance excellence.”
Kyari further emphasized that “to convert crises to opportunity, the industry will need to harness her strengths through bold structural and regulatory moves, technology and innovation, safe and profitable operations, with focus on collaboration, cost optimization, and transformation of business models to create sustainable businesses. With respect to the future of hydrocarbons in Nigeria, Africa and the world, a new age of opportunity is here, not just for Nigeria but for Africa.”
He commended the event organisers for their commitment in sustaining it, adding that “For four years, the NIPS conference has served as a strong platform that has fostered engagement, promoted the Nigeria’s Oil & Gas Industry and enormous opportunities within Nigeria’s energy sector.”
NIPS is a Federal Government of Nigeria official petroleum industry event with the Federal Ministry of Petroleum Resources and all its parastatals including the NNPC, NCDMB, DPR, PEF, PTDF, and PTI as joint hosts.