The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, on Tuesday said deregulation of the oil and gas downstream sector will boost investment in the refining business and facilitate exponential growth in the nation’s refining capacity.
He made the assertion while delivering his keynote address titled entitled, “Vision for the Downstream Sector on the Continent,” at the opening ceremony of the African Refiners Association (ARA) Week 2020 which held virtually with the theme: “Towards Cleaner Fuels for Cleaner Air.”
According to him, the idea of price stabilization which led to the introduction of fuel subsidy in the 1970s was noble, had grown into a huge financial burden on the nation’s treasury over the years, necessitating its removal in March 2020.
He stressed that the move will not only free up much-needed cash to fund infrastructural development, but will also eliminate market distortion, foster competition between operators, get more private sector players to build refineries in the country and promote efficiency across the entire value chain.
“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 was quoted to have said in a statement issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr. Kennie Obateru.
He said the Corporation was making concerted efforts to carry out holistic rehabilitation of its refineries in Port Harcourt, Warri and Kaduna, noting that it was also collaborating with relevant stakeholders to establish modular and condensate refineries as well as supporting private sector establishment of refineries.
“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,” Kyari added.
He further explained that 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.
According to him, this process has progressed significantly as the process of partner selection was ongoing to ensure sustainability of the refineries post rehabilitation.
He noted that Nigeria was intensifying the use of natural gas to ensure lower emissions, adding that natural gas has been identified as the fuel of choice for the future as it has the full credentials to support the achievement of the Sustainable Development Goals (SDGs).
To this end, he 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 Executive Secretary of ARA, Engr. Anibor Kragha, commended 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.
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