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Nigeria to stop fuel importation by mid-2023, says Kyari

. Accuses churches, mosques of storing stolen products

Group Chief Executive Officer (GCEO), Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, yesterday said the country will stop importing petroleum products by mid-2023.

Kyari said this when spoke with State House correspondents in Abuja, on a number of issues plaguing the industry and hampering revenue growth.

He noted that the existing refineries cannot meet consumption needs, saying: “Even if all our four refineries in three locations are operating at 90% of installed capacity, they will only be able to raise 18 million litres of premium motor spirit (PMS). That means even if all of them are working today, you would still have a net deficit of PMS to import into this country,” he said.

He added: “The population has grown exponentially with millions of vehicles thereby putting pressure on demand for the products.”

Even if all our four refineries in three locations are operating at 90% of installed capacity, they will only be able to raise 18 million litres of Premium Motor Spirit (PMS).

Refining operations

For these reasons, Kyari said NNPC invested in the Dangote Refinery with a 20% equity and has a first right of refusal to supply crude oil to the plant.

He continued: “But we saw this energy transition challenge coming. We knew that time will come when you will look for people to buy your crude oil and you will not find. And that means we have locked down the ability to sell crude oil for 330,000 barrels minimum by right, for the next 20 years.

“And by right also, we have access to 20% of the production from that plant… and this refinery will come on stream latest by the middle of next year.

“The projection is the first quarter, but we think that it can come up latest by the middle of next year. If it does, this refinery alone, because it has a 650,000 per barrel capacity and different technology means that it can crack the crude in a manner that you can have more gasoline than a typical refinery.

“That means that the refinery has the ability to produce up to 50 million litres of PMS. So, the combination of that and our ability to bring back our refineries will completely eliminate any potential petroleum product into this country next year. You will not see any importation into this country next year. This is very practical. This is possible.

“As a matter of fact, when we’re done with our refineries and the Dangote Refinery, the very many small initiatives that we are doing; small, modular, condenser refineries that we’re building, if that happens, which we are very optimistic it will happen, you will see that this country will now be a net exporter.

“We hope to export petroleum products not just to the West African sub-region, but to the rest of the world. This will happen, and the flow of supply will change. By the middle of next year, it will change. So, you will have no need for the importation of petroleum products into this country by the middle of next year.”

That means that the (Dangote) refinery has the ability to produce up to 50 million litres of PMS. So, the combination of that and our ability to bring back our refineries will completely eliminate any potential petroleum product into this country next year.

Crude oil theft

Kyari said NNPC has not given up on ending the menace of oil theft, as the Presidential intervention involving the Chief of Defence Staff, Navy and other security agencies is recording a huge success in this regard.

Decrying the ring of collusion in the criminal activity, a phenomenon he said cuts across all strata of society including places of worship, as stolen crude are now stored in churches and mosques with the consent of the clergy, members, and neighbours.

“Wherever our products have gone to, everybody has become some sort of vandal,” he said, adding that at least 295 illegal connections were spotted on a 200km stretch of pipeline with 344 reservoirs created by vandals.

He said: “As you may be aware, because of the very unfortunate acts of vandals along our major pipelines from Atlas Cove all the way to Ibadan, and all others connecting all the 37 depots that we have across the country, none of them can take delivery of products today.

“The reason is very simple. For some of the lines, for instance, from Warri to Benin, we haven’t operated for 15 years. Every molecule of product that we put gets lost. Do you remember the sad fire incident close to Sapele that killed so many people? We had to shut it down, and as we speak, we have a high level of losses on our product pipeline.

“You remember in Lagos when a fire outbreak happened on one of our pipelines? We discovered that some of the pipelines were actually connected to individuals’ homes. And not only that with all sensitivity to our religious beliefs, some of the pipelines and some of the products that we found are in churches and mosques.”

Kyari noted that the high spate of vandalism, forced the NNPC to shut down its entire network of pipelines conveying petroleum products nationwide.

He continued: “When we say we are losing several 700,000 barrels of crude oil daily, we mean it. This is opportunity loss. There is no company that will produce oil and then you lose 80% of that and continue to produce the oil.

“So we deliberately shut down the pipelines whenever we see these infractions getting to a limit that we cannot manage. So that means as we speak today, we know for sure, there’s at least 700,000 barrels that we could have produced that we can’t because we cannot guarantee the safety of the pipeline.”

Consequently, he said NNPC now relies heavily on petrol tankers; a development he said is not favourable to roads.

We discovered that some of the pipelines were actually connected to individuals’ homes. And not only that with all sensitivity to our religious beliefs, some of the pipelines and some of the products that we found are in churches and mosques.

Recovered items

According to Kyari, the war against crude oil theft in the Niger Delta has resulted in the recovery of 22 million litres of stolen crude as well as about 22 million litres of diesel, 0.15 million litres of Premium Motor Spirit (PMS), and 0.76 million litres of Kerosene.

Similarly, about 122 suspects have been arrested in connection with the oil thefts while 11 vessels, 30 speed boats, 179 wooden boats, 37 trucks and cars have been seized and destroyed.

Other items recovered are 959 metal tanks, 739 ovens, 452 dugout pits, 342 reservoirs and 355 cooking pots have been destroyed.

In addition, some 207 pumping machines, 12 welding machines, six power generators, and two drilling machines were recovered from the oil thieves.

Against this backdrop, he admitted that “We cannot totally stop crude oil theft but technology will help us to bring it to zero level.”

Oil reserve company

Kyari also informed that a National Oil Reserve Company is being floated to ensure energy security, as is the practice in many other countries.

He said: “The National Reserve Company will be built on Build, Operate and Transfer (BOT) arrangement and every country has a reserve company. There is a holding cost and the government must be ready to pay for that.

“Usually, the military runs it but we will run it. We will bring back the pipelines so that the reserve can supply the products at different locations across the country.”

On the end-to-end security strategy of the NNPC, Kyari clarified that government agencies, deployment of technology, communities and contractors have been engaged to man the NNPC right of way (the pipelines).

Regarding the controversy surrounding the pipeline surveillance contract, he explained that the NNPC did not award the contract to Government Tompolo, an ex-militant leader; but given to prequalified companies following due process of bidding.

“We looked for those who can do the job and it was given to them. We did not give such contracts to individuals, but to companies. Tompolo may have interest in the company,” he said.

Listing on the Exchange

Amid growing speculations, the NNPC GCEO further disclosed that the Company will be ready to for listing on the Nigerian Exchange Limited, and issue its first Initial Public Offering (IPO) to the public by June 2023. Earlier media reports have hinted at an IPO anytime between 2023 and 2024.

Kyari said: “You are aware that the law clearly stipulates that this company’s interest can be diluted subsequently. The federation, the shareholders – you and me under the guidance of the National Economic Council, that we can dilute our interest instead of having a bulk interest held on behalf of all of us.

“There can be private interest that can be held by individuals or companies in this company (NNPC Ltd). And this is very different. It will happen, because it is the requirement of Section 54 of the PIA, which clearly stipulates that we can dilute the interest of this company.”

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