Mele Kolo Kyari, the new Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) has promised to revive Nigeria’s four state-owned refineries, bring to an end the recurrent fuel scarcity and fuel importation as well, before the end of President Muhammadu Buhari administration in 2023. Can Mr. Kyari revive the four state-owned refineries as well as end fuel importation and the annoying fuel scarcity forever? Many Nigerians are sceptical, because many GMDs before Kyari have made similar promises, but couldn’t achieve 100 % result.
Nigeria imports most of its required refined petroleum products because the four state-owned refineries seldom meet their combined 445,000 bpd capacity due to nearly four decades of neglect, mismanagement, and periodic attacks on the oil pipelines.
Acute scarcity of petroleum products in Nigeria dates back to the early days of oil production in the country. It irritates most Nigerians and also puts any NNPC-GMD on the edge of his or her seat. But many factors are responsible for the scarcity of petroleum products. The long term solution to fuel importation and the recurrent scarcity of petroleum products in Nigeria is what is critically needed. The long term is double-pronged; completely deregulate the industry and bring Nigeria’s refinery capacity to what oil refining experts call a high Nelson Complexity Index. A Nelson Complexity Index of 10 or above indicates that a refinery has high potentials in value addition and high value products.
With the right approach, coupled with the available cheap and easily accessible crude oil; competent manpower and funds, Nigeria’s refineries would operate at near 100 per cent utilization with minimal downtime. What is that right approach? – effective management of Nigeria’s 5,120km pipelines network, efficient management of the nation’s four refineries and building of new refineries.
The biggest problem facing the oil pipelines in Nigeria are: incessant illegal tapping by oil thieves, sabotage, right-of-way incursions, slow detection of leaks and in-line equipment failure due to inaccessible sites, including the old-fashioned method of managing the pipelines. However, there are advanced technologies that can successfully tackle these problems: SCADA- Supervisory Control and Data Acquisition, Fiber Optic Cable (FOC) and Go-devils /scrapers or Smart pigs (also known as intelligent pigs). SCADA or FOC provide advanced warning in real time which helps pipelines companies to take quick action to protect long-stretch of pipelines network, even if it is located in inaccessible areas where visual inspection might be difficult. The impressive aspect of the SCADA and FOC technologies is that they sense and locate interference before the pipelines damage takes place. Smart pigs are used for detecting anomalies in pipelines or other mechanical damages. As for right of ways incursion, experts argue that the best way to tackle it is via community involvement through sustainable CSR projects and programmes. In addition, a robust standby force is needed to effectively man the security of the pipelines.
Our refineries are not working because of poor management system. Since government will not privatize them, let the government put up effective conditions for their operations: the four refineries should be granted full autonomy to cater for themselves- pay their bills and dividends to the government. When the workers know that the refineries output will determine their take-home pay; things may change.
Apart from reviving the four refineries, Mr. Kyari should go modular. There are affordable 1,000 bpd – 30,000 bpd Modular refineries whose equipment units are pre-fabricated on skid-mounted structures prior to shipment to any location. If this is done, the new GMD has found one of the keys to fulfilling his promises. However, for Mr. Kyari to achieve 100% success, he has to keep up and bring-out the benefits of the painstaking reforms, utilize his in-house experiences to put the right people in the right positions.
Zayyad I. Muhammad, wrote from Jimeta, Adamawa State.