Refineries need best private sector for efficiency — WIEN

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By Olanipekun Yinka

Following the disheartening condition of the nation’s refineries, the president of Women in Energy Network (WIEN), Mrs. Funmi Ogbue has said Nigerian refining capacity must be placed in the hands of the best private sector that can run them efficiently.

Funmi who is also the CEO of Zigma limited made this know to Nigerian NewsDirect while reacting to the statement made by the Nigerian National Petroleum Corporation (NNPC), on the closure of production for eight months, due to the poor conditions of its refineries.

She said if refining capacity is handled by private sector, Nigerians would get refined products, petrochemicals required to enable the country industrialise with requisite manufacturing capabilities needed to create job for youths.

She said ‘’ NNPC has been quite upfront and transparent about the state of the refineries and their plans to rehabilitate and bring them back to working condition.

“As we all know refineries are quite specialised, high turnover and low margin business which require a very high level of efficiency and therefore in my view the operating structure is extremely critical if we don’t want to find ourselves in a situation where we have to talk about refineries again as a matter of national discourse.”

She disclosed that the best model for such a specialised and low margin but critical for industrialisation business, utilise the same structure the NNPC has used for its crude exploration and production ventures

Funmi reiterated that the government has a lot of knowledge and historical examples of where these models had worked for the common good of all stakeholders.

She said, “Private sector involvement in working models that are used upstream should be used as a matter of urgency for our midstream and downstream sectors.

“Also, our refining capacity must be brought back up, into the best private sector hands that can run them efficiently and give us refined products, petrochemicals, export products, gas urgently required to enable our country industrialise with the requisite manufacturing capabilities required to create the much needed jobs for our teeming youth.

“West African countries like Ivory Coast have been able to operate their SIR refinery in collaboration with the private sector and less government interference.”

WIEN boss further noted that developing in-country capabilities for gas processing, refinery for PMS, diesel, aviation fuel and petrochemical plant are all critical elements for industrialisation and nation building.

She said” Nigeria must get right as a nation. If for nothing else but as a legacy for the late chief or staff Mallam Abba Kyari who in my mind symbolises the ambitions of the President Buhari’s administration to improve the electricity situation using a government/private sector collaboration model.”

While reacting to the current unstable power supply situation nationwide has always been attributed to gas supply constraints, she said the Transmission Company of Nigeria (TCN) at different times within the year reported zero megawatts of power generation from Geregu, Sapele and Olorunsogo power stations due to the gas supply challenge.

She said “the low gas supply to these and many other power plants continue to restrain optimal generation into the grid and consequently the quantum of electricity transmitted for distribution.

“Based on this, there is a need to urgently address the issue of gas shortage to thermal generating power plants nationwide.”

However, she proffered three solutions which the togetherness of government and the industry come  to address the problem of lack of new investments in upstream gas production.

She said ‘’ one of the reasons for the delay in these investments is the uncertainty over fiscal conditions, or simply put, the PIB. Once we are clear with the PIB, we should see more investments come into development of more gas fields.”

The next is to curb gas flaring because over 10 per cent of gas produced in the country is wasted through flaring. This gas, if properly harnessed can be used for domestic power generation.

She, however, attributed the final solution is to dealing with the pricing of electricity, which the private utilities have long demanded for a review adding that Investors in the sector are not motivated to invest in new infrastructure as the tariffs are not cost reflective and which in turn weakens the liquidity of power companies and ultimately harms their capacity to deliver efficiently.

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