Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru has called for improved private sector collaboration in order to improve petroleum capacity utilisation in the country, saying there are huge opportunities which the private sector can benefit from if it partners with government.
Baru who disclosed this recently at the maiden conference of West Africa International Petroleum Exhibition and Conference (WAIPEC) With the theme; ‘Collaboration and Local Capacity Development as an Enduring Strategy in a Low Oil- Price Environment’ in Lagos, noted that in West Africa, the entire production capacity is about 6,900 barrels, from which Nigeria contributes 73 percent, adding that “the capacity of what we are getting is very low.”
Represented by the Chief Operating Officer Upstream NNPC, Managing Director of National Engineering and Technical Company (NETCO), a subsidiary of NNPC, Mr. Siky Aliyu, Baru said the corporation is committed to improving the utilisation capacity of the refineries to attain about 60 capacity utilisation by the end of 2017 or the first quarter of 2018. He also pledged the commitment of the corporation to achieving 90 percent capacity utilisation in 2019.
The NNPC boss said a lot is being done while expressing optimism that there are opportunities inherent for investors to key in and harness to boost the growth of the sector.
“There are other potential areas in trade diversification. Here, our focus should be how we can partner with other West Africa countries to get things going. Fixing of the refineries is not the main challenge; there is the issue of pipeline vandalisation. The minister for state for Petroleum is doing a lot to involve the Delta-Niger communities. Fixing the refineries requires huge capital outlay and this is why we need private sector collaboration,” he added.
Baru further explained that the success story of the Detailed Engineering Design (DED) of the Topside of TUPNI’s Egina FPSO project delivered safely, on time and within budget by a consortium of Nigerian Engineering companies led by NETCO, describing the feat as a good example of successful collaboration and capacity development. “No engineering project of this magnitude has been handled locally because no single local company had the capacity to do so,” he stated.
He added: “The collaborative success story of the DED of Egina FPSO project, which represents only a maximum of 10% value chain of the FPSO, has indeed repositioned the Nigerian Engineering companies. Rather than being the traditional competitors, they are now partners in progress and they are expanding their synergetic arrangements in readiness to take up other projects of this magnitude. Examples of such upcoming projects are; SNEPCO’s Bonga South-West FPSO projects, NAE’s Zabazaba FPSO project, Exxon Mobil’s Bosi FPSO Project, NLNG Train 7 and/or NLNG Debottlenecking Project, etc.”
“If so much can be said to have been achieved with DED which represents just about 10% of a typical FPSO project, one can only imagine what other opportunities exist in the remaining 90% of the project value chains in the procurement and construction scope of work for such projects which are characterized by high requirements for expertise, finance and other capacity requirements.
“It is imperative that local companies rendering services in this larger segment need to emulate the Engineering companies by coming together to position themselves for effective competition with international companies who currently have a competitive advantage in this current low price regime,” he said conclusively.
In his address, the President of Petroleum Technology Association of Nigeria (PETAN) Bank Anthony Okoroafor, said WAIPEC is committed to promoting the region’s oil and gas industry, while seeking the industry best practise, explore new technologies and develop commercial opportunities for business and international investment.
Okoroafor said the inaugural event commissioned by PETAN is focused at serving the industry as an integrated platform for business organised by the industry.
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