Uche Usim, Abuja
As the Federal Government strives to deepen private sector participation in the oil and gas sector, the Society of Petroleum Engineers, SPE, Nigerian Council has advised against selling the assets at this time as the government would not get the fair value from the assets due to the heavy crash of the global price of crude oil.
Addressing newsmen in Abuja on its forthcoming 2020 Oloibiri Lecture and Energy Forum Series, the Chairman of the SPE Nigeria Council, Mr. Joe Nwakwue regretted that Nigeria has been unable to revamp the ailing refineries after several years of collapse because of insufficient political and institutional will to manage its assets.
Nwakwue explained that the refineries can be revamped, adding that the problems of the facilities were not technical but institutional.
He said: “Running refineries is not rocket science. Refineries are run everywhere in the world. I had worked in a company whose refinery was built in 1932, is still running till today.
“That we cannot run the refineries here have more to do with institutional challenges than technical challenges. We can see that private refineries are coming and they would be run. It is not that we cannot run refineries, Nigeria can run refineries.
“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 also blamed the divestment of international oil companies from the Nigerian downstream petroleum industry on government’s participation in the sector.
Nwakwue said: “The disposal from the downstream sector is because it is difficult to compete against a state-owned entity. So why would you create a situation where the NNPC becomes a major supplier of the market and you expect those entities to exist and continue to compete with an NNPC? It does not.
“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.”