The story of oil in Nigeria will be incomplete without a highlight of the role played by what is today geographically known as Imo State. Shell Camp in the State capital, Owerri, is a testimony to the fact that the state hosted oil exploration activities at some point before it was terminated with the onset of the civil war.
Though Imo State is considered, rightly, as an oil bearing and producing state, a recognition that gave it a seat on the board of the Niger Delta Development Commission (NDDC), most of its most productive oil fields were ceded to Rivers State by the National Boundary Commission. But this is not the subject of this discourse which is mainly to appreciate ongoing efforts by the Nigerian National Petroleum Corporation (NNPC) to return the territory to its rightful status in the nation’s oil map by the siting of a 200,000 barrels per day (bpd) condensate refinery in the area with a similar project to go on simultaneously in nearby Delta State
The two projects are to be built in Western Forcados Area and Assah North, Ohaji South Areas of Delta and Imo States respectively. For the records, natural gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from natural gas fields.
This newspaper commends the group managing director of NNPC, Dr. Maikanti Baru, for this initiative he embarked upon to establish green refineries in the country which is part of the strategies to eliminate importation of petroleum products and guarantee energy security. These projects, in our view, hold enormous prospects for the downstream activities in the oil and gas industry.
It is pertinent to point out that, already, the bid opening for the provision of consultancy services to carry out a feasibility study for the refineries are ongoing. The condensate refineries, when fully operational, will increase gas supply to power plants in parts of the country with the resultant effect that power supply will improve significantly and place economic activities on an even keel.
From indications, the condensate refineries which are designed to operate along the Nigerian Liquefied Natural Gas (NLNG) model will, without doubt, increase the nation’s revenue base, provide jobs for the people and save for the country a lot of money in foreign exchange. The strategic initiative by the Baru -led oil conglomerate is also expected to increase the energy security for the nation and grow the NNPC refining capacity from 445,000 barrels per day to 645,000 barrels per day. We are satisfied that the promoters of the condensate refineries planned them to run fully on commercial basis which entails the commitment of partners who will be willing to invest as a show of confidence in the viability of the nation’s economy. The partnership is envisaged to operate in a similar manner with NLNG model where the federal government through the NNPC will aspire to get a majority share but not a controlling share.
We also note that part of the underlying reason for the initiative is engrained in the overall policy objective of the Federal Government to grow the economy to seven per cent of Gross Domestic Product (GDP) by 2020 through the Economic Recovery and Growth Plan (ERGP). To achieve this, the refineries are, therefore, part of the government’s plan to ensure that sufficient power and fuels are available to drive growth in the economy.
This newspaper is enamoured by the fact that these projects will run on models that represent a significant departure from what obtained in the existing refineries which sadly hamstrung their efficient management and productivity. That decision by the NNPC is commendable as it will allow the private sector to have the confidence to drive the plants and ensure that the bureaucracy that is involved in government business is completely eliminated.
These refineries are assumed to be coming in anticipation of the implementation of the Petroleum Industry Governance Bill (PIGB) which will hopefully create the National Petroleum Company (NPC) that will be strictly governed by the Companies and Allied Matters Act (CAMA).
In our opinion, there are many benefits to be derived from these refineries as soon as they come on stream. They will stem the incidences of pipeline vandalism that has remained a nightmare in terms of their negative impact on the economy as well as the cost of securing them just as they will also provide an opportunity for the nation to restart the Aviation Turbine Kerosene (ATK) production. The conception of the refineries is also seen by industry watchers as a strategic step that will preserve the NNPC market share at the upstream, midstream and downstream sectors of the nation’s hydrocarbon value chain. Even politically, that the refinery is built in Imo state, for instance, will give the people the much sought after sense of belonging and assuage the pangs of perceived marginalisation.
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