Domestic Refining Hindered by Moribund Facilities – DPR

Department Of Petroleum Resources - DPR

A statement credited to the Department of Petroleum Resources’ Director, Mr. Sarki Auwalu revealed that moribund oil and gas facilities across the country would limit domestic refining capacity and hinder projected benefits and revenues.

Auwalu made the comment during a visit to a fabrication yard located at Ilase Village, Snake Island, Lagos State.

READ ALSO: Nigeria’s External Reserves Drop by $1.1bn in February

While expressing dissatisfaction that the facility which was licensed to provide oil and gas service had not been operational since 2015 due to contractual issues, Auwalu insisted that the Federal Government was committed to reactivating the moribund oil and gas facilities across the country. He added that the move was part of the government’s effort to increase domestic refining capacity and gas utilization to curb unemployment and poverty in Nigeria.

He said: “The industry depends on facilities like this to actualise its investment because it is like a support system for the oil and gas sector. Our visit is to the edifice that we licensed and it is dormant. But we are going to make it active because we see it as an opportunity to grow the oil and gas industry.

“We have seen an opportunity we can use to support our gas utilisation, penetration and expansion programme. We have issued several licenses for modular refineries that need fabrications. We cannot allow this kind of facility to remain under-utilised.”

According to Auwalu, efforts are currently ongoing to double the contribution of the oil and gas sector to the country’s Gross Domestic Product, (GDP) to about 15 per cent from the current eight per cent.

He also noted that the facility can play a significant role in supporting and driving the federal government’s gas utilisation, penetration and expansion programme when functional, stressing that because of the shutdown of the facility, some of the fabrication jobs that could be done at the facility were being shipped to China.

In his remarks, the Engineering Director, Kaztec Engineering Limited, Mike Simpson, said some of the unutilised equipment in the facility included a dive support vessel, pipe laying vessel and an already constructed jacket that could be used for oil and gas operations, which could be used for oil and gas operations, saying that when operational, it has the capacity for 2,000 direct employees and 7,000 indirect employees.

Simpson affirmed that the facility became dormant in 2015 after its main contractor, Addax Petroleum, declared a force majeure on its operations.