- Recommends IJV for all midstream assets
Sopuruchi Onwuka
Nigerian senior oil workers, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is demanding government to abdicate management roles in the nation’s strategic midstream and downstream petroleum industry assets to enable private investors inject innovation into the system.
The group which addressed the media in Lagos Tuesday declared that the nation’s refineries, depots and pipelines have gone obsolete and moribund under the management of the Nigerian National Petroleum Company (NNPC) Limited and must be rescued by inviting the efficient hands of the private sector.
President of PENGASSAN, Comrade Festus Osifo, who declared the position of the senior oil workers in the company of the national executive members of the group, advised the NNPC Limited to take strategic national interests in all refineries in the country by maintaining maximum 49 percent interest and ceding 51 percent operating interest to private investors.
This, according to him, entails that the NNPC Limited should deliberately build its non operating stake in the Dangote Refinery to a minimum of 45 percent but not more than 49 percent and also relinquish 51 operating interest in all existing government refineries.
Comrade Osifo who gave faint hope on the long awaited revival of the Port Harcourt Refinery stated that the facility has laid moribund for too long for a quick rebound, adding that it would be unrealistic o expect the nation’s refineries managed by the NNPC Limited to come online in the near future.
Parts of the Port Harcourt Refinery under rehabilitation
He blamed the rising cost of fuel and other commodities in the country on poor management of deregulation and devaluation of the Naira at the foreign exchange market, adding that the associated inflationary trend in the economy is pushing the population deeper into poverty.
The situation, he noted, has made it urgent to totally displace all forms of product importation with locally produced petroleum product in order to enable the domestic economy start reaping the full value benefits of petroleum resources.
On local production of petroleum product which necessarily entails local refining, processing and blending; Comrade Osifo declared that the four refineries in the hands of NNPC Limited must be returned to functionality.
“Once operational, the government should divest majority shareholdings and own at most 49% of the shareholding in the four refineries. Core investors will be brought in to take the 51% as applicable in NLNG.
“The Federal Government should increase its shareholding stake in Dangote’s Refinery from the current 7% to at least 45%. This will ensure further energy assurance and security for the citizens.”
He also added that government should partner with players in the private sector to maintain the already available petroleum product storage depots in the six geopolitical zones in the country.
“When operational, petroleum products will be stored there and only made available when there is a shortage in supply. This will help in eliminating the bad roads and severe erosion-imposed perennial shortages that often lead to queues at petrol stations across the country,” he added.
He also called for the expansion of pipelines to enhance delivery of refined petroleum products across the length and breadth of the country and also reduce axle pressure mounted on roads by trucks carrying petroleum products.
In pointing at some of the key conclusions from the just concluded PENGASSAN) Energy and Labour Summit (PEALS) he called government “to develop and strengthen the country’s oil and gas value chain to ensure a more efficient and reliable distribution system downstream.”
He argued that “without such a system, the country would continue to face recurring fuel shortages as its reliance on a truck-based distribution system is deficient and inadequate to meet the demands of Nigerians given its vulnerability and disruptions due to bad roads, flooding and ad-hoc logistics arrangements.”
