‘Institutional issues hold refineries down’

From John Ofikhenua, Abuja

The Society of Petroleum Engineers (SPE) Nigerian Council on Monday blamed institutional challenges for the shortcoming to repair the nation’s refineries.

It dominated out the query of technical challenges from the problems bedeviling the entities.

Speaking to reporters in Abuja on its forthcoming  Oloibiri Lecture and Energy Forum Series, Chairman of the SPE Nigeria Council, Mr. Joe Nwakwue, stated the shortcoming of the nation to revamp the refineries after a number of years of dilapidation, was a mirrored image of the failure of the federal government to  handle its belongings.

He defined that the refineries could possibly be revamped, including that the issues of the services weren’t technical however institutional.

He stated: “Running refineries isn’t rocket science. Refineries are run in all places on the planet. I had labored in an organization whose refinery in-built 1932, was nonetheless working until as we speak.

“That we can not run the refineries right here have extra to do with institutional challenges than technical challenges. We can see that personal refineries are coming and they might be run. It isn’t that we can not run refineries, Nigeria can run refineries.’’

Read Also: ‘Refineries recorded N12.6b expenses‘

“It talks to a deeper issue; the failure of the state to do what needed to be done. I believe that the move towards private sector refining is the answer. The refineries are not working not because running refineries is rocket science, but because we have not put our house in order.”

He additionally blamed the divestment of worldwide oil corporations from the downstream petroleum business on authorities’s participation within the sector.

According to him, the explanation why asset disposal is rampant within the downstream sector was as a result of it’s unimaginable for a personal sector participant to compete in opposition to a state-owned entity.

He, nonetheless, famous that the worldwide oil corporations’ divestment from the downstream sector was not a sign of lack of confidence within the sector, noting that if the function of the Nigerian National Petroleum Corporation (NNPC) was lowered out there as we speak, a lot of multinationals would return to the sector.

Nwakwue stated: “The disposal from the downstream sector is as a result of it’s troublesome to compete in opposition to a state-owned entity. So why would you create a state of affairs the place the NNPC turns into a serious provider of the market and also you count on these entities to exist and proceed to compete with an NNPC? It doesn’t.

“No sensible investor goes to compete against a state-owned entity, because you will not win. This is because the state-owned entity has all the power and strength of the state behind it. You cannot win. Your best bet is to partner with the entity.”

He additional cautioned the Federal Government in opposition to the disposal of its stakes in oil and gasoline belongings in the meanwhile, noting that with the present declining value of crude oil within the worldwide market, the federal government wouldn’t get the truthful worth from the belongings.

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