Sopuruchi Onwuka

Group Chief Executive Officer of HIS Energies, Mr Chiezie Nwosu, has declared that enhanced oil and gas production has become urgent following increasing propositions for investments in local refineries and industrial parks.

He told Oracle Intelligence that petroleum output boost has become necessary to meet the demand jump expected from increasing number of local refineries and gas based industries conceived to drive expansion of the country’s industrial capacity and boost employment opportunities for growing youthful population.

In placing the prevailing divestment programmes that tranfer greater part of Nigeria’s conventional oil and gas operations to new players, Mr Nwosu stated that the indigenous players that currently slip into the shoes of the international operating companies “can drive the needed increase in oil production to over 2 million barrels of oil per day and gas production to over 15 billion standard cubic fit of gas per day.”

“This will boost both export earnings and, especially, domestic consumption to make Nigeria a hub for oil refining, petrochemicals, gas based businesses & associated products and power,” he explained.

Oracle Intelligence reports that Mr Nwosu’s HSI Energies Limited is currently driving promotion of industrial parks for gas based industries in the country. The parks are also conceived to host scalable refinery developments, captive power generation and micro grid networks, and sundry businesses that are ancillary to manufacturing, refinery and electricity supply operations.

Mr. Nwosu holds over 30 years local and international experience in the energy industry with demonstrated expertise in the management of upstream oil & gas projects, new business development, divestments and acquisitions, midstream gas, downstream refining and renewable energy strategies.

Mr. Nwosu has worked with leading international oil and gas companies including Baker Atlas, Shell Nigeria, SINOPEC-Addax Petroleum Nigeria, and Waltersmith.

Mr Nwosu’s concept of using modular refineries to activate and drive industrial expansion of the country is premised on the advantages of policy incentives, cost and speed of delivery as well as scalability of the capacity to reach full size single train refinery status.

He noted that big single train plants like the Dangote Refinery would run through long project gestation periods to full commissioning, thereby delaying delivery of urgent goals.

HIS Energies, Oracle Intelligence reports, works on leading consortium of investors seeking to dot the Nigerian upstream petroleum operations landscape with some 30 scalable modular refineries with collective processing capacity for 300,000 barrels per day. The refineries which would located in the immediate proximity of oil production sites are conceived to deliver immediate industrial development and creation of jobs in the host environments.

He pointed out that Waltersmith’s Ibigwe Refinery in Imo State and the Aradel’s Refinery in Rivers State have already proved the investment concepts that would now be replicated across the region to spur industrialization, reduce crime on the petroleum industry and harness Nigeria’s enormous youthful manpower to for productive engagement.

The modular refineries in the country, including those proposed by HSI Energies, would assist significantly in meeting the local demand for kerosene, aviation jet fuel, diesel, and fuel oils. They are however scalable to larger volume capacity that produces enough naphtha to justify further investments in production of petrol.

Mr Nwosu stated that spreading modular refineries along oil production sites in the country would significantly cut production theft, address associated spills and environmental degradation, optimize resource value generation and create jobs that can transform bands of vandals into productive workforce.

The modular refineries in proposal, he pointed out, would also solve the critical question of producing stranded marginal fields. He explained that have a third party investors with onsite modular refinery would automatically address the evacuation constraints that daunt potential investors in marginal field development.

The onsite refineries, he added, would save the oil producers significant cost on crude evacuation pipeline tariffs which could reach as much as $5 per barrel. The total of significant $40 million paid by small companies using third part evacuation pipelines could be transformed into investments in onsite modular refineries.

On employment, Mr Nwosu stated that upstream operations do not provide significant employment for the local people due to the specialized skills required for their activities.

“If you are producing 5000 barrels per day as a company, you may be running with 500 employees only. But for every 10,000 barrels per day modular refinery would have 1200 people employed either directly or indirectly.

“When you actually consume your energy within the country, then there is a direct correlation between energy consumption and GDP growth. If you treat oil and gas as export commodity, then it is someone else that is adding that value and adding that GDP growth to his economy. So we have to start thinking of consuming as much of those natural resources as we can to help with our GDP growth by making energy available and affordable,” Mr Nwosu stressed.

He made it clear that every 200,000 barrels per day refinery holds the potential to light the country’s GDP by 0.8 percent, one of the highest impact from any segment of the economy.

In pointing at the country’s urgent need to meet its foreign exchange needs, Mr Nwosu stated that the refinery products could also be exported to earn foreign exchange or sold at the prevailing exchange rate.

He added that economy also draws fiscal earnings from modular refineries through operating taxes and value added tax. He added that additional refineries in the country would flood the market with supplies and crash the prices per liter of products following market forces.

Distribution of products from numerous modular refineries, Mr Nwosu stated, automatically spawn logistics clusters that also create domestic economic values. Such clustering also evolves into industrial clusters, he noted.

IN calling for pan-industry collaboration in heeding government’s call for pushing the country’s output to over 2 million barrels per day, Mr Nwosu made it clear that it is also critically urgent for the country pump out greater volumes of oil and gas to meeting growing investments in processing, refining and consumption.

Oracle Intelligence reports that Dangote Industries Limited operates the largest refinery in the country with its 650,000 barrels per day single train plant located in Lekki free zone, Lagos State. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) states that the refinery, which is already pumping out products, is still to be completed, technically certified and licensed to operate.

Besides the Dangote Refinery, the NNPC Limited also operates brownfield refineries located in Port Harcourt, Warri and Kaduna. The four plants hold combined capacity for 445,000 barrels per day, but they are currently moribund due to poor operating competence.

The BUA refinery which has been licensed to establish holds 200,000 barrels per day processing capacity with single train plant.

Modular refineries of Varying capacities are also springing in addition to Waltersmith’s Ibigwe Refinery, Aradel’s Ogbele Refinery, OPAC’s refinery, Azikiel’s refinery and many more which have been licensed to establish.

The HSI Energies 30 modular refineries package which comes with industrial parks and power plants would perhaps be the largest investment haul in the local refining space, promising collective processing capacity for 300,000 barrels per day.

With existing and new capacity in calculation, domestic refineries might tasks the producers in the country with increased production rate to meet internal crude requirement for local refining.

Mr Nwosu, explained that significant boost in oil and gas production has become urgent to meet rising internal demand, meet government’s fiscal targets, solve above ground industry challenges, create employment and drive expansion of the country’s industrial capacity by creating localized gas based industries.