The planned deregulation of the downstream sector by the Federal Government, and the ongoing construction of Africa’s biggest oil refining facility, Dangote Refinery, underscores the need for a national approach to attract needed investment in the downstream sector. it is said that, upon completion, the refinery will have the capacity to process about 650,000 barrels per day of crude oil, making it the largest single-train refinery in the world. It will put Nigeria in the spotlight for crude oil refining, competing with world refining superpowers in countries such as the United States, China, and Saudi Arabia.
Recently, the Nigerian National Petroleum Corporation (NNPC) announced that it plans to acquire a 20% minority equity stake in the facility. On one hand, this is aimed at ensuring an undisrupted supply of petroleum products across the country when the transaction is concluded, and on the other hand, the locally refined petroleum products will not only serve the Nigerian market (thus reducing the forex expended on importation of these products) but will also serve international markets, earning more forex for the nation. While these investments are key in driving growth, there is need for a reliable petroleum product importation data and people-focused service, which hitherto, has been non-existent due to the nature of petroleum product operations mechanisms applicable in Nigeria. The current trend has largely contributed to creating an atmosphere of mistrust between the citizens and operators in the downstream sector.
Nigeria’s economy has been negatively impacted by the COVID-19 pandemic. With a lowering GDP, forex crunch, rising inflation rates, and cost of major food items, it is critical to adopt measures to cushion the effects of deregulation and other macroeconomic pressures on the masses. More importantly also, to rebuild the trust and gain the support of the common Nigerian on the ongoing transformation in the downstream sector. Speaking at the 12th Nigerian Gas Association (NGA) International Conference which was held in Lagos in February this year, the Minister of State for Petroleum Resources, Timipre Sylva, said that the government’s goal is to move to a cleaner, more available, accessible, acceptable and affordable energy use. According to the Minister, this was to foster the sustainability of the Nigerian economy, enhance energy availability, create well-paid jobs, and take millions of Nigerians out of poverty.
The government’s transformation roadmap is critical in revitalizing the Nigerian economy and more importantly, shows that President Muhammadu Buhari’s strategy is already yielding fruits. At a time when the country is going through major economic challenges occasioned by the current COVID-19 crisis, fluctuation in the price of crude oil, insecurity, and low investment, this would not only enhance growth but boost investors’ and customer’s confidence in the downstream sector. Moreover, the above sentiment aligns with the four cardinal focus of the Department of Petroleum Resources (DPR) which is aimed at enabling business and creating opportunities in the downstream sector. The four focus areas include quality for product assurance and customer satisfaction; quantity for transparency, value for money and consumer protection; safety for personnel and assets and public safety as well as Integrity for investment protection and business continuity. From a regulatory point of view, the achievement of these milestones will depend on a sustainable partnership with stakeholders to enable value creation for investors and the government. Attainment of this goal will enhance DPR’s efforts towards upgrading the downstream of the petroleum industry to the global standard, hence, underscores the need for sustained collaboration among the various stakeholder groups.
‘After deregulation, the next big thing that has happened to the Nigerian Oil and Gas Industry is the Nigerian Gas Expansion Programme (NGEP) and the passage of the Petroleum Industry Bill (PIB)’, remarked Taiwo Dele, the Chief Operating Officer, Gas & Power, an affiliate of Quest Oil Group. According to him, the move will create a level playing field for investors and catalyze the development of Nigeria’s vast gas resources which as of today, stands at 206.53 trillion cubic feet according to the Department of Petroleum Resources (DPR)’. He further said that Nigeria is at a crossroad, and gas-to-power and other cleaner energy solutions seem to be the way forward towards achieving sustainable and inclusive economic growth in the country in line with the Sustainable Development Goals (SDG) 7’. Innovation is the only way forward in this industry, and that is what we latch our success to’’ he said.
Quest Oil Group is setting the pace in the downstream sector as a thought leader and a disruptor in the energy industry. Apart from acquiring Ascon Oil Company (the first private bulk white Petroleum products storage, sales, and distribution channel) in 2019, the company is set to restore the credibility and the lost glory of a sector which until now, was a shadow of itself. The company says that its focus on trust and value, symbolizes its reinvigorated strategy for the Nigerian petroleum retail market. As part of its plans to position the sector in the global transition map, the company plans to provide alternative sources of fuel to its customers as it plans to deploy autogas infrastructures across its service stations strategically located across the country. This is not only a giant stride, but further gives credence to the company’s commitment and investment in innovative clean energy technology in the downstream sector. This, the company believes, will lead to employment generation, and the creation of cleaner fuel sources which will reduce the cost of energy for Nigerians.
Written by Gerald I. Moore
