Searching for $100 billion to enhance Nigeria’s oil and gas industry: How long before fuel scarcity ends
Downstream challenges in Nigeria and incessant fuel scarcity in the number one African oil producing nation has become a cumbersome puzzle so strenuous to solve. The ever increasing fuel scarcity is dousing President Buhari’s popularity and a head ache on the management of the Ministry of petroleum.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu is of the opinion that Nigeria needs about $100 billion to enhance its oil and gas activities including workable refineries. President Buhari reflects that added to infrastructural challenges, deep corruption that is endemic in the oil and gas industry must be expunged for the industry to function.
While these are strategic opinions and options, the core questions how immediate will the nation be able to attract indigenous and international investors willing to put in about $100 billion in the industry to activate it and how many years from now will it take? The issue of corruption in Nigeria’s petroleum industry has become a culture difficult to counter and subdue. President Buhari was voted into power on one of the cardinals that as an apostle of change that he will democratically fight to minimize or eradicate the opprobrious tradition of culture which has transformed from generation to generation in a country highly enriched with human and natural resources.
Nigeria refineries have for years remained epileptic and underperforming below capacity or totally out of operation causing incessant fuel scarcity in the country with other aligned negative economic issues.
Since onset, refineries which were supposed to produce in full capacity at about 445,000barrels per day have never operated up to 240,000 barrels per day. Sometimes it could stay for long without any operation due to failure of parts, leaks and lack of essential turn around maintenance.
Nigerian refineries do not have problem with feed stock. The major challenges confronting the refineries are deep rooted corruption, operation management, involving human capital and application of relevant technologies.
As the government once again clamors to set the path straight and ease the suffering of the masses and ensure economic recovery by working towards getting the refineries up and seeking for partnership with international companies to operate the refineries more profitably, it becomes necessary to pinpoint that the refineries need some face-lifting before serious investors could be attracted. The issue of security and corruption must be nipped at the bud. Many of the international investors and existing mega oil companies are still skeptic of Nigeria’s investment environment considering security quagmires that may disrupt production and operations.
Lot of hopes and optimism has been placed from the side of the Minister of State for Petroleum and the Group Managing Director of Nigerian National Petroleum Corporation that the coming of Dangote Refinery and Azikel Refinery if completed will reduce or totally eliminate fuel scarcity in the nation and revamp economic growth.
Again, the core question still remains pertinent on how long the nation will continue to suffer until 2020 -2021 when it is predicted that all things been equal the $11 billion Dangote Refinery which has a capacity of 650,000 barrels of crude oil will be completed. The Azikel Refinery owned by Dr Azibabu Eruani, with 12,000 barrels crude capacity has just completed 65% on the phase 1, 11 and 111 stages, may take another 3 – 4 years before completion.