Stakeholder calls for concessioning in Nigeria’s downstream sector

Toyin Odesomi, Lagos

L-R: Managing Director/CEO, Mobil Oil Nigeria, Mr. Tunji Oyebanji; President, Lagos Chamber of Commerce and Industry, Chief Dr. Mrs. Nike Akande; Executive Vice Chairman, Techno Oil Nigeria; Former Executive secretary, Petroleum Products Pricing Regulatory Agency , Mr. Reginald Stanley and Chairman, LCCI Petroleum Downstream Group, Mr. Ken Abazie during a Business Clinic on Petroleum Downstream at Oriental Hotel, Lagos.

A former Executive Secretary of the Petroleum Products Pricing Regulatory Agency PPPRA, Mr. Reginald Stanley has advocated for the urgent commercialisation and concessioning of product pipelines to address some of the major issues affecting Nigeria’s downstream sector.

Stanley who was speaking at an oil and gas forum organised by the Lagos Chamber of Commerce and Industry said the Nigerian National Petroleum Corporation NNPC should also launch realistic tariff to make the sector attractive to new investors.  

While stating that some of the pipelines must be re-laid, he said that security of pipelines should be prioritized and handled by the state to allow for effectiveness.

Speaking on the deregulation of the downstream sector, Stanley said the role of every agency or body involved in the process must be clearly spelt out and particularly called on the Standard Organisation of Nigeria to work with lubricant Blenders to eliminate fake lubricants and also ensure that fake plant operators are swiftly prosecuted.

Pointing to the fact that refineries in Nigeria have never achieved more than 20 percent capacity utilization in the last twelve years, he listed the following as the way forward to achieve optimal utilization of the refineries:

  • Refinery to run as a commercial business.
  • NNPC to source for partners based on the Nigeria Liquefied Natural Gas model (51/49).
  • Modular refineries to be watched.

Also speaking at the Forum with the theme, 2016 Business Outlook: Petroleum Downstream Perspective, Managing Director of Mobil Oil Nigeria Plc, Tunji Oyebanji, noted that the year 2016 will be another tough year for the downstream sector as shortage of forex will impact products import.

He however expressed optimism that in the medium and long term, there was hope for the sector as easing of regulatory environment would boost investor considerations and hence bring about a competitive environment which would in turn bring about self sufficiency in local refining.

The forum which was tagged a business clinic was organised by the Petroleum Downstream Group of the Lagos Chamber of Commerce and Industry to find lasting solutions to the challenges facing the downstream sector of Nigeria’s oil and gas industry in line with the agenda of the Federal Government.