The Executive Chairman, Integrated Oil and Gas Limited, Emmanuel Iheanacho, has called on the federal government to enable more refineries to be built in the country.
Iheanacho, a former Minister of Interior, made the call at the 2020 edition of Nigeria International Petroleum Summit (NIPS) in Abuja.
“We are not investing enough in refineries. Instead of waiting on OPEC to give us a quota of 2 million barrels per day (bpd), we can produce 4 mbpd and build refineries to refine and add value to our crude” he stated.
Iheanacho compared the Nigeria downstream market structure and that of the United States of America, a non-member of the Organization of Petroleum Exporting Countries (OPEC).
“The US is has a population of 327 million with a total of 139 refineries with the refining capacity of 16.7mbpd. Texas, a state in the US has a population of 28.7 million with 47 refineries and a refining capacity of 5.7 million barrels per day. Compare these numbers with Nigeria that has a population of 200 million people with 4 refineries with installed refining capacity of 520,000bpd but is only able to refine 5 per cent of installed capacity.”
He decried the plight of the country that has not been able to get things right despite having been in the oil and gas business for over 60 years. He further implored the government to take a second look at the market structure in terms of cost and efficiency.
“Open market competition creates efficiency in the system. In that vein, government must take a look at the subsidy regime and regulation. The subsidies do not really benefit the common people” he said.
In his presentation, titled ‘Sustaining Industry Momentum in the Downstream – What new strategies, tactics and innovative partnership’, Huub Stockman, Managing Director of OHV Energy stated that refining is a catalyst for the rest of the oil and gas industry.