Ade-Ade Bosun, Abuja.
The Nigerian National Petroleum Corporation, NNPC, has come up with an explanation over why some privately owned refineries are yet to commence production despite being completed.
The NNPC, made the clarification via its Chief Operating Officer, COO, Refineries, Mr. Mustapha Yakubu, at the ongoing Nigerian Oil and Gas, NOG, Conference in Abuja. According to him, investors are yet to conclude with the corporation arrangements for the procurement of feedstock for the refineries.
Yakubu who noted that crude oil is ordinarily sold in foreign currency added however, that owing to the volatility of foreign exchange, the NNPC has arranged to sell crude to private refineries in naira.
“Today, they have a challenge. Some of them constructed refineries today they cannot start because we are discussing how to allocate crude to them. We are asking them to pay in foreign exchange. You know what is happening to foreign exchange, volatility. So, we have to find a common ground so there is a discussion in that regard to allow them pay in local currency.”
Yakubu, who is a panelist at the forum, spoke on the topic: What strategies in the mid and downstream sectors will take Nigeria closer to energy self-sufficiency?
While noting that NNPC was collaborating with the private investors to encourage them, he posited that the partnership has become necessary because it is possible for the investors to build refineries without have feedstock, crude or condensate to refine.
“Whatever they do, they have to work within certain regulations. Refineries are not bakeries. I can go to Wuse market and buy flours. But for those refineries you need feedstock whether crude or condensate. This crude belongs to government. So there is need for collaboration. We need to support them because you can build refinery and there is no crude. What happens? The partners will be running after them.
Government needs to make money from this crude oil. A lot of sectors need money. The health sector needs money. There should be that assurance if I give you crude you have to pay for it and you need to also deliver the balance.
The investors that are building refineries today we have to collaborate that is the way we can encourage them.”