cap28:



can you imagine what state nigeria would have been in if america banned the importation of nigeria's crude oil and prevented nigeria from having access to any international credit facilities??

@jphilips
lets go back to first principles on this subsidy matter, not just oil subsidy, but subsidy in any form,
I can tell you now that the reason nigeria is poor and keeps being poor is because over the years govt with obviously very lean resources (which is further eroded by curruption),  keeps decieving itself and nigerians that it will provide a blanket finding for all, this has been the practice over the years, govt promises to give you free health care, free education, free transport, free fuel etc etc etc and ends up failing, its simply not sustainable
I always wonder how we ever ended up practicing subsidy the way we do it, a blanket subsidy for all an sundry, reasonable countries dont do this, anybody who has been to a country where hard work reigns supreme and is rewarded knows that to qualify for subsidy is more than just showing ur face.

People will have u believe that there is subsidy because pms is being imported, if is was refined by govt locally, then there would be no subsidy, this very faulty arguement assumes that the oil is free, it also assumes that the land owners have no right to whats beneath them.

jphilips i dont know where u stand on govt run companies, but i am sure u know that its a no no in this modern era, throw in a high level of curruption and we have a retrogressing nation. While it seams you r helping poor people on the short term you are actually kiling off thier long term opportunities.

They way i see it, we need to set ourselves a target of say 10years. by which all exportation of raw crude from the country would stop. We should refine everything in-country, theres nothing stoping us but ourselves, but no govt run refineries, if nigeria has become an industrial nation by then we may even become a net importer of oil else we concentrate on exporting refined products worldwide,
no law says black man must always exist at subsistence level, na we vo use fake subsidy place ourselves there.

jp philips:


Now that nuisance beaf is off the stage, what you propose above is a realistic approach adopted by nations you believe are successful.
i am a Nigerian, i love to approach the Nigerian issues in its peculiarity, someone spit a white lie that has been in circulation since January and i have looked at all indexes of reality  (Nigeria wise) and i am yet to prove its veracity.

even the special adviser on new media (aka Beaf) could not prove it, i am glad you tried coming to his rescue but i tell you, it is a fruitless end.

most govt officials are professional lairs and they don't cease to sell craps to gullible Nigerians, (i don't mean you are one).

when the issue of subsidy came up, the truth was obvious but the agents of poverty twisted the truth, i wrote twice to the DG of NTA to grant me audience to sit with iweala and let her look me in the eye and tell those lies,

whether the contact add. i got was wrong or whether my request was merely sequestrated is a discussion for another day.

when iweala said she will reinvest the subsidy money, did you believe her? i for one didn't, where will the funds come from? what is the sharing formula? which projects are targeted and at what cost?

these unanswered questions are still the reasons why the presidency reduced its promise to kabu kabu aka ocho passengers bus transit because it was all lies.

i watched madueke on Tv when she said refineries are on the way, did you equally believe that N0nsense?
or the Mickey mouse of a cbn governor that said " increase in pump price will attract investors"
exactly how?

these people are professional lairs with updated credentials, two months on, they have tried the palliative of buses, no show, they tried BEGGING for refineries no show.
when exactly will they realize they have no workability plan for themselves and Nigeria at large.

Forget those inept beaf's employers and lets talk,
i have researched extensively the oil and gas structure of Nigeria and some screws don't fit.

there is no way the subsidy regime will affect local refining in an oil producing state like Nigeria with existing refineries rather it is quite the opposite but the Govt will tell you otherwise.

the problem of refining in Nigeria is COST OF RAW MATERIAL in this case CRUDE, it has absolutely nothing to do with subsidy,

lemme break it down for you,

if you import PMS from europe for instance and you land it at Apapa at 110 naira, Govt inefficiencies will bloat it to almost 150 naira you know why don't you? transport, storage, administrative costs has to be paid for.

juxtapose it with having a refinery on ground with cheap crude,

shell is saying that they cant run a refinery in Nigeria because they know the price at which the refinery will receive its crude and that is what they are indirectly telling you.

over the years, the Nigerian govt made no reasonable effort to drill independently of their JVs, so anything that requires crude must come at the cost of jv crude.

Assuming Nigeria on their own have a daily local production capacity of 250,000bbl/d do you think you need to beg shell, oando and co to build refineries? they will jump at the offer, Indians will move their make shift refineries instantly to Nigeria.

The difference between the JV crude and locally produced crude are thus;

1 indigenous or state owned companies foot the exploration bills but being state owned, their cost of funds are cheaper and the repayment plan is longer (eg the NLNG trains of 2000 are still being repaid till date)

2 there is no equity agreement aka royalty so everything is yours ( do you now understand why AFREN even with its paltry 150,000bbls are negotiating for a jv agreement)

these two factors will make the cost of the crude cheaper, because it is carrying only the burden of logistics without royalty.

if you go through the books of our multinationals, you will realize that the logistics involved in extracting  1bbl of crude ranges between 8usd to 15usd/bbl depending on the terrain. this is the actual cost of production.

if for instance, the cost on the international scene is 106.81usd/bbl, the profit marign is 106.81 - 15/8usd/bbl this is why oil companies are making it big in Nigeria.

let us place the refinery boys in tandem with the subsidy boys and see who is killing who.

if NPDC (state owned) executes an exploration project and flows oil at logistics cost of 15usd/bbl and makes profit of 3usd/bbl, Oando will buy that crude at 18usd/bbl if they wish to set up a refinery, even at 25usd/bbl it is still a good deal.

supposing OANDO has a 250,000bbl/d capacity refinery "EXISTING" in Nigeria, the cost of raw material in this case crude will be 250,000bbl/d X 18usd/bbl + refining cost of say 6usd/bbl,

oando can affort to sell their PMS at 40naira per litre and still make profit without subsidy.

now the importers land theirs at 110naira and govt inefficiencies throws them to almost 150naira and they go begging for subsidy if the govt decides to put a price tag of 97naira/l, remember that at 40 naira per litre OANDO is already making profit, so extrapolate what 97 naira will give?

it is commonsensical to assume that total deregulation will be activated and all importers will que up as Registered oando distributors.

Look at what our Govt is asking of shell

NPDC has a paltry 90,000bbl/d as locally produced at what price? guess? 106.81usd (international crude price)

now, beaf in his wildest dream is asking shell/OANDO to construct (for starters) 250,000bbl/d refinery and buy crude from either JV or NPDC at 106.81usd/bbl.

now 106.81usd X 250,000bbl/d + refining cost = over 35million usd dollars per day.

a litre of PMS from such a refinery will cost nothing less than 300 to 500 naira per litre if not more, the big question is ; will there be market for such expensive products? can Nigerians afford it? can the Nigerian govt afford to pay subsidy on such expensive product? for how long can they sustain the subsidy pending when the loans for constructing the refineries are repaid?

if you followed the subsidy probe closely, you will realize that if you subtract corruption from the figure so far, the subsidy paid on the products from the refineries were higher than that from imported products, that was the argument that NNPC was operating at a total loss but the Mickey mouse at CBN will tell you otherwise.

that was the calculations i did and told M0ronic beaf that shell will be silly to accept such trap and that is the reason the likes of Oando will never consider building a refinery till Nigeria can guarantee, locally produced crude oil at a cheaper price.



perhaps the shell MD just told beaf what he refused to accept from me, now he is threatening fire and brimstone,
a 23yr old agency that could have salvaged Nigeria's energy imbroglio was mismanaged and you sit to tell me there is a work around, well, im waiting and watching.

for the love of Christ, international oil companies are not our house boys, if you want refineries first fund it in part, guarantee a conducive business climate and they will gladly come and do business with you, enof said.

By Ross Alabo-George
ACCORDING to official figures, the leading oil producing state, Rivers, received N1,053 billion between 1999 and 2008 in federal allocations. By contrast the North-eastern states of Yobe and Borno, where the Boko Haram sect was created, received N175bn and N213bn respectively. Broken down on a per capita basis, the contrast is even starker. In 2008 the 18.97m people who lived in the six states in the north-east received on average N1,156 per person.

“By contrast Rivers State was allocated N3,965 per capita, and on average the oil producing South-South region received on average N3,332 per capita. This imbalance is compounded when the cost of an amnesty programme for militants in the delta is included together with an additional 1 per cent for a special development body for the Niger Delta. To boot, the theft of oil by profiteers in the region diverts tens of millions more weekly from federal coffers. – Sanusi Lamido Sanusi.

YES, forget these per capita figures! I agree the North is poor. Yes, I agree the poverty has bred millions of destitutes, who have become instant and easy recruits for Boko Haram. But my question is: Who impoverished the North?

A caveat: I am an unabashed capitalist who believes that every citizen has a right to do good business and make profit. I salute hard work and do not disparage honest efforts. However, uncompassionate capitalism driven by pulleys of aristocracy breeds a brutal class order worthy of condemnation.

In my last article titled – ‘El Rrufai’s amnesia: The day Boko Haram Wore Jeans’, I categorically stated that greed and the senseless chase for power by the Fulani aristocrats and political elite of the North are responsible for the extreme poverty of the North. I still and will always stand by that. My position did not go down well with my targets; they responded vituperatively.

Mallam Sanusi’s statistics was intended to mislead us by ruffling the rudder of our common sense. See, Ekiti state has a 2012 budget 0f N88 billion; Kwara State, N90 billion; Cross River State, N144 billion; Anambra State, N82 billion; Enugu State, N74 billion. Now let’s look at the 2012 budgets recently passed into law by the four major Boko Haram occupied states – Kano State has a budget of N 210 billion; Borno State, 150 billion; Gombe, N94 billion; Yobe State, 80 billion.

A simple comparative analysis shows that Ekiti State has about the same revenue as Yobe and Gombe, but only 17 students passed WAEC and NECO in Gombe state last year, while Ekiti is known for its high literacy level. Gombe State has a bigger budget that Enugu and Anambra, why has MASSOB not bombed anyone.

Borno State has a budget twice that of Enugu State but the poverty and unemployment level in Borno State is more than thrice that of Enugu State. Borno has a bigger budget than a Niger Delta state – Cross River. While the leaders of Cross River over the last decade have transformed it into the nation’s leading tourist destination; those of Borno have transformed it into a Somalia.

Kano State gets the highest statutory allocation from the Federal Government, because on paper Kano is the most populated state in Nigeria, yet Kano has about 1.6 million destitute Almajiris. Kano has a budget almost thrice the budget of Enugu, twice the budget of Kwara, Anambra and Ekiti, but how come almost 90 per cent of students in Kano fail WAEC? How come the poverty level in Kano is higher than all these states put together? Why is the North so poor? From the figures above I have shown that Southern states with lesser budgets have shown better development performance than most North Eastern states with bigger statutory allocation and budgets.

Now, I need to tackle the sensitive question of revenue allocation that has infuriated the Mallam Lamido Sanusi and Mallam Elrufai and their likes. Niger Delta states get higher revenue allocation because they contribute virtually all the eggs in the national crate. That is expected. Albeit the 13 per cent remains grossly inadequate, the CBN Governor has suggested that his Boko boys are resisting the disparity.

I want to posit that the North-East through their aristocrats and ex-military rulers (except Gen. Mohammed Buhari) rake in more oil money (from the Niger Delta) individually than any Niger Delta state, and collectively more than twice the entire Niger Delta put together. In this disquisition, I have attempted to show that 80 per cent of crude oil and gas produced by indigenous companies is controlled by the North-East. It is an area they have well conquered through Generals IBB, Abacha and Abdulsalami. However, the loots never get back home.

Uneven nature of the distribution

In this first part I will attempt to describe the very uneven nature of the distribution of the nation’s wealth among the Northern aristocratic families and their military generals who for decades looted Nigeria. They did so blatantly, and while Nigeria was weeping about oil windfall loot and others, Nigerians would wail if they know how much of the nation’s resources these folks allocated to themselves and their business fronts before they stepped aside.

Let us therefore begin: To the state of origin of Boko Haram: Borno State. Enter Cavendish Petroleum, the operators of OML 110 – with good yielding OBE field. This oil block was awarded to Alhaji Mai Deribe – the Borno patriarch, who even in death will remain the richest man dead or alive in the history of Borno State – by General Sani Abacha on July 8, 1996. OML 110 has a proven oil reserve in excess of 500 million barrels (more than the entire 300million barrels reserve of Sudan). As yet with the capacity to produce about 120,000 barrels of crude oil daily from its OBE 4 and OBE 5 wells. At optimal production levels, Cavendish nets circa N4billion monthly in crude oil sales (using current oil price of $100pb). Cavendish Petroleum’s N4bn monthly net dwarfs the monthly statutory allocation of Borno which is about N3bn and its internally generated revenue staggers around N1billion.

His mansion in Maiduguri has become a tourist attraction. A simple Google search will throw up different perspectives of Mai Deribe’s palatial home.

Enter Oriental Energy Resources Limited, a company owned by Alhaji Mohammed Indimi, a Fulani and close friend of General Ibrahim Babangida. Also worthy of note is that General IBB’s first son is married to Alhaji Mohammed Indimi’s daughter – Yakolo Indimi-Babangida, who also serves as a director in the company. Alhaji Indimi hails from Borno State.

Good yielding offshore oil blocs

Oriental Energy Resources Limited runs three oil blocks: OML 115, the Okwok field and the Ebok field. OML 115 and Okwo are OML PSC, while Ebok is an OML JV. All of them good yielding offshore oil blocks. OML 115 on its own is 228 sqKm. On OML115 Oriental Energy Resources Limited has 60 per cent while Equity Energy Resources AS. On Okwok, Addax has 40 per cent and on the Ebok field, Oriental Energy Resources shares with none: its 100 per cent. AMNI produces twice as much as Cavendish Petroleum.

I will then shift to the centre of the aristocratic hegemony in the North East – Kano. Here. Enter the Fulani Prince Nasiru Ado Bayero, Mallam (Prince) Sanusi Lamido Sanusi’s cousin. He is a key shareholder and director in Seplat/Platform petroleum operators of the Asuokpu/Umutu Marginal Field with a capacity of 300,000 barrels monthly and A 30mmfcsd gas plant capable of feeding 100MT of LPG. The Ado Bayeros, Yar’Aduas and Atiku Abubakar are Nigerian directors of Intels. It is a private port that has grounded three Federal ports in the South. Intels is discussed later.

Enter South Atlantic Petroleum Limited (SAPETRO). South Atlantic Petroleum (SAPETRO) is a Nigerian Oil Exploration and Production Company that was created in 1995 by General T. Y. Danjuma. General Sani Abacha awarded the Oil Prospecting License (OPL) 246 to SAPETRO in February 1998.

The block covers a total area of 2,590km2 (1,000 sq. miles). SAPETRO partnered with Total Upstream Nigeria Ltd (TUPNI) and Brasoil Oil Services Company Nigeria Ltd (Petrobras) to start prospecting on OPL246. Akpo, a condensate field was discovered in April 2000 with the drilling of the first exploration well (Akpo 1) on the block. Other discoveries made on OPL 246 include the Egina Main, Egina South, Preowei and Kuro (Kuro was suspended as a dry gas/minor oil discovery).

Barrels of condensate

In June 2006, General TY Danjuma divested part of its contractor rights and obligations to China National Offshore Oil Corporation (CNOOC) for $1 billion (N160bn). Akpo exports about 230,000 barrels of condensate daily. Condensate export is not regulated by OPEC, so SAPETRO/TOTAL exports as much as possible each day. Egina exports about 75,000 barrels of oil daily.

Therefore, Akpo and Egina fields export just over 300,000 barrels of oil/condensate daily (three times what the country Ghana exports). SAPETRO (TY Danjuma) get 25 per cent of this. Now, note I have not talked about the gas component – it’s about 2.5 trillion cubic feet. The money SAPETRO nets each month is more than the monthly statutory allocation of all the Niger delta states combined and also more than the oil revenue of Ghana. Do your maths.

Enter AMNI (or is it AMIN?) International Petroleum Development Company. AMNI owns two oil blocks – OML 112 and OML 117. In the production sharing contract, AMNI gets 60 per cent for owning the oil block and Total gets 40 per cent for providing technical advice. OML 112 was awarded on the 12/02/1998 while OML 117 was awarded 06/08/1999 all by Gen. Abdulsalami Abubakar. Operations started on both blocks 0n 26/02/2006. The licenses are due to expire 11/02/2018 and 05/08/2019 respectively. (Now you see why the next election is important?)

The Okoro and Setu fields in OML 112 are operated by Afren Energy, a company substantially controlled by Rilwanu Lukman. The Okoro and Setu oil fields have about 50 million barrels in reserve and currently produce/exports just a little below 20,000 barrels per day. The chairman of AMNI International Petroleum and Development Company is Alhaji (Colonel) Sani Bello a Fulani from Kontagora, Niger State. Lest I forget, Alhaji Bello’s son – Abu, is married to General Abdusalami Abubakar’s eldest daughter.

Enter Express Petroleum and Gas Limited floated by Alhaji Aminu Dantata. General Abacha awarded him OML 108 on the 1st of November, 1995. CAMAC Houston, a company owned by Kase Lawal bought 2.5 per cent of Express Petroleum’s 60 per cent holdings. The other 40 per cent on OML 108 is owned Sheba E&P Limitedi. SEPCOL operates the Ukpokiti offshore field in Shallow water Nigeria, which was acquired from ConocoPhillips in May 2004.

Enter Shebah Exploration And Production Limited (SEPCOL) . It is the operator of the Oil Mining License 108 offshore Nigeria. Head office is in Lagos, but ‘head quartered’ in Minna.

Enter Consolidated Oil. Conoil Producing Limited is an integrated upstream oil and gas company. They are the operator of six blocks in the Niger Delta as well as 25 per cent Equity holder in the Joint Development Zone (JDZ) Block 4. Corporate Head office is in Lagos, but its ‘Headquarters’ is in Minna, Niger State.

Conoil signed a technical operator agreement with Continental Oil and Gas Limited (CONOG) to provide 100% funding and technical service agreement to operate blocks OML 59 on a 40 per cent (Conoil) / 60 per cent (CONOG) basis. Conoil entered into a Production Sharing Contract with the NNPC by virtue of an agreement executed on October 17, 2008.

Conoil’s has overall potential hydrocarbon resources of over 1.0 billion barrels of oil and 7.0 trillion cubic feet of gas. General Ibrahim Babangida awarded the first oil bloc to Conoil in 1991. The company produces about 100,000 barrels per day.

Enter Rilwanu Lukman, another Fulani multimillionaire with controlling holdings in Afren, the operators of AMNI oil blocks and also with very key interest in the NNPC/Vitol trading deal, Vitol is a London based oil trading company. Vitol lifts 350,000 barrels of crude oil daily from Nigeria.

Enter Intels and the Yar’Adua, Ado Bayero family and Alhaji Abubakar Atiku. The Oil and Gas Free Zone and Oil Services Centres, as well as support bases, are operated from government-owned facilities, leased to Intels under long-term agreements. Intels runs a ‘private port’, a venture that has systematically killed the Calabar, Warri and Port Harcourt ports.

More money in profit

There are over one hundred major companies operating at the Intel facility in Port Harcourt. The company makes more money in profit than the government of Rivers, Bayelsa and Delta states put together. I shall give details and figures in part two of this disquisition.

Finally, let me introduce you to NorthEast Petroleum. The name is as clear as the message it sends. I do not need to write so much about NorthEast Petroleum registered as NorEast. NorthEast Petroleum Nigeria Limited is the holder of OPL215 license, covering an area of 2,564 square kilometres in water depths between 200 to 1600 metres. NorEast is the parent company of Rayflosh Petroleum Nigeria which got the 2005 bidding round and was awarded the blocks OPLs 276 and 283 closing thereupon a Joint Venture Agreement with Centrica Resources Nigeria Limited and CCC Oil and Gas.

Not surprising, NorthEast Petroleum is owned by another Fulani businessman from the North East, Alhaji Saleh Mohammed Jambo. The license was awarded to him by General Ibrahim Badamosi Babangida in 1991 and then renewed in 2004. So far $50million has been spent on the very promising Okpoi-1 and Egere -1 exploratory well.

In the Part II, we shall finish the discussion. We will table other North Eastern billionaires who make more money than their states of origin from Niger Delta oil blocks.

With all these oil blocs owned by ‘North- Easterners’ in the Niger Delta, it should be clear to El-Rufai and Sanusi who really benefits from the Niger Delta Amnesty Programme.

Sadly, the National Bureau of Statistics Poverty Profile Report just released shows the North East as the poorest region in the nation with 69.1 and 76.3 as absolute and relative poverty levels respectively, while the South-West had the lowest poverty profile with 49.8 as absolute poverty level and 59.1 relative poverty level. With these figures from the National Bureau of Statistics, I rest my case. The rich man’s wealth is his strong city: the destruction of the poor is their poverty. Let us reason together.

jp phillips: 4  the cheap crude i advocate for Oando or any other will be refinery is not a subsidy but a ratiocination between cost of producion and marginal profit.
Oando will buy it from the producer (NPDC) at[b] 25usd/bbl[/b] and Npdc will still make profit, not any subsidy but everyday buisness.
the choice of selling crude at 106 usd will be over as soon as the Opec limit is reached.

5 every country in the world prioritize the energy need of its citizens, if America can spend billions to fund offshore conflicts just to secure their energy interest, i dont see the reason Nigeria cannot sell crude at[b] 25usd/bbl if it attracts a profit margin.[/b]
remember that this cheap crude is void of the jv agreement which Nigeria is still selling its 2.5mbbls/d at international crude price (once Opec limit is reached) and the[b] cheap one at 25usd/bbl.[/b]
its double earning not a subsidy.

if you think that Nigeria doesnt prioritize its energy needs ask yourself why we had DSO (domestic supply obligation) of about 250,000bbls/d selling below int. crude rate before 2008.

@Jp Phillips,
what has worked in libya under autocratic rule with a population of delta state and roughly the same oil as nigeria will not work in Nigeria, your insistance on a government tring to run a distored economy is what is the issue here,
Trying to use examples of such countries like Kuwait, saudi and UAE will not work with nigeria, their conditions are really exceptions ot the rule and are truely not sustainable on the long run,

I hope you know that the international black market does not follow opec quotas, otherwise it wont be called a black market, allocating crude at $25 far below the international oil price is a reciepe for disaster, the profit difference is just toooo much. too irresistable, common, it like transfering the subsidy situation from the downstream sector to the upstream sector.

How can you say that if I could have sold a product for $106 but decide to give it to somebody for $25, then it is not subsidy? Your argument is that everything beyound opec quota should be given away at a cheap price still doesnt work because there is no absolute law that says we must respect opec quotas, some oli producing countries are not even members of opec and sell their oil without opec hindrances,

Instead of looking at the unrealistic situation that have created lazy citizens in Kuwait, Saudi UAE etc, look towards countries like USA, UK, that have more oil than nigeria, yet it is not dashed freely or cheaply in the name of subsidizing comsumption, free enterprise and hardwork drives the economy, not blanket subsidy as you are preaching.
You stated earlier that if local refineries were to but the crude at international prices that pms would cost =N=300 to =N=500 per liter in nigeria, does that mean that countries that buy at international prices sell at that rate? =N=300 is $2 per liter or $8 per galon for those living in the USA, as you can see this is not even close to the truth,

Jp Phillips, you and other nigerians, both inside and outside of government should stop trying to run a distored economy, stop trying to artifically fix prices to impress poor people,
what needs to be done? to allow for total refining of local product at a competitive price (this is international price - cost of freighting), (not giveaway price system you are advocating), allow private enterprises set up here (international and local), not to compete against govt owned refineries, if we eventually have 20 refineries operating in nigeria exporting only refined products, imagin the amount of jobs created.

I wonder who makes economic policies with "black market" as a yard stick what is Nigeria doing in the black market? did i mention black market? are you suggesting that a competent Navy cannot stop illegal smuggling?
are we talking about security of our waters or are we discussing the way forward on cheaper energy? bros, stay on course abeg.
countries who patronize black markets are countries under heavy sanctions which Nigeria is not a member.
if the Nigerian waters is porous, you don't blame the policy but the cohesive apparatchik of the Govt whose job is to secure the waters.
please stay on point the argument.

Appearently you are not a realist, you are waiting for Navy, customs, FG and all politicians to become born again and give their lifes to christ, I wont be too surprised if you are als waiting for Nitel, Nipost and Nigerian airwaste to rise,

My solution does not require the entire country to be righteous before things can happen, it requires competition and free enterprise to create the kind of accountability you have in the telecoms industry, the aviation industry and other industries where govt has decided to step aside and allow nigerians runs things themselves, they may not be perfect but its a step in the right direction,

The fact that we are poor and underdeveloped does not mean we create an enviromet of laziness and corruption, Use your head JP phillips, you are almost on the verge of sounding intelligent, you can actually reduce govt corruption by reducing what govt is involved in, not waiting for the messiah while running an unsustainable system
Posted on: Today at 02:55:18 PM

Mr Dalover

i don't want to start a law enforcement argument, if you seriously think that Nigerians don't deserve a workable law enforcement then i have nothing else to say on corruption and racketeering. it is not surprising that youths have already lost faith in this country like i have on my footer note

mr dalover paper economics don't work in oil economies that is the reason Sanusi is not doing well, if you are really ready to put up economic solutions from a panoramic oil and gas perspective, speak the language of oil and forget the rest semantics.

jp_philips: [b]it is much disheartening as it is for you that Nigeria is a monogamous income earner, there is nothing either of us can do about it,
we can only make plans on the Niger delta oil as the only viable source of revenue at the moment.
the decision to sell crude below intl crude price  has a poethora of long term economic implications

@jp phillips,
the key is not and can never be in dashing out crude, the reason why sanusi's policies dont seam to work is that we expect them to run side by side with an artificial system, you claim to be a guru in the oil industry with sound knowledge in economics, but u would rather suggest a policy that does not take the immediate enviroment into consideration, stop decieving urself, asking for the imposible and unrealistic conditions,

I have told you that your solution requires everyone involved to be a saint and u say corruption is not the issue here, if you cannot see the problem in the context of the nigerian environment and how to get out of the present situation, then you obvoiusly cant see the bigger picture,

You talk of deserving a workable law enforcement and that exactly why i say you lack the capacity to propose a practical solution to a problem,

I would like you to answer just this question. At what point in the near future (say in next 10years) do you expect to have a reliable police, army, navy and politicians who you can beat ur chest and operate honestly?

You actually expect 300,000bbls to be dashed to local refineries at $25 bbl and all nigerians to hold hands and sing kunbaya, i think its time u wake up from ur slumber

[b]You call alison maduake, sanusi and okonji iweala clowns, i guess you are much brighter than them, most of the guys u call clowns are tried and tested in the private sector before serving this government and nerve to feel u r better than any of them, all because they told you that free crude is unrealistic, where did they ever say that IOCs must be the ones to build the refineries?
[/b]You refused to give their method a try, sit down and cry for free oil and call them clowns,
Please show me the research where refineries buying at international prices are dying, i need to examine what exactly is causing this situation, i am not convienced that the prices of crude are responsible for this, or dont pple in those cointries buy refined products again? do the citizens find imported pms cheaper to buy?

Look I am totally against anything that would actively keep the govt running businesses as a method to drastically reduce corruption, provide services and increase the middle class, but if u feel govt to directly create an artifical system like they have being trying to do the the exchange rate, creating a black market,

Apearantly you are probably hooked on free oil, and it has defined your insistence on continuing in along this path.

I would expect that your end target is to ensure total refining of all our crude produce, but from what i see you are content with nigeria exporting crude as long as ur cheap source of crude flows for your consumption, for those like me who wish to see between 10 and 20 refineries set up in nigeria refining all our produce and providing refined products for both the local market and international market, this your $25 idea is a totally retrogressive idea

@ the bold, you were carried away by vituperation that you forgot what the issue is, oga just look at the topic of the thread as a reminder,your heroes are begging IOC's for refineries.

sorry to digress a little,

please could you list the private sector where Madueke thrived and succeeded? don't forget to mention achievements credited to her name.

CBN Mickey is a matter for Another day, the number of abandoned bank branches on my street alone is a testimony of his meritorious service. heroes indeed

i can deduce that the only difference between you and beaf is that you think, but your approach remains same.

i gave you a list of refineries to google their status perhaps find out their modus operandi and you are still looking for my research white paper? don't be lazy my friend.

i didn't say you should "dash" anybody crude, if you choose to mis quote me please give me a little credit for my efforts in enlightening you.

i said at $25 the producer is making profit, the profitable producer sells to a refinery at a "cheap" cost who will refine and sell to both local and abroad clients.

it is left for the Govt to choose which role to play in the chain.

please re read everything i wrote before sounding like beaf. nobody on my chain is losing, the difference between my model and yours is that you have failed to realize that following;

1 cost of extracting crude varies with countries

2 the profit margin between the intl crude price and cost of production in Nigeria is wide

3 intl crude price is a standard for export, internally you can regulate prices to support your investment market.

4 there was no where i emphatically said that it must be an all round govt show, i only used NPDC as an example and i stated my reasons, as a reminder, it is easier for NPDC to access cheaper long time funding than any other private institution in Nigeria, please read before you type.

oil and gas investment is very capital intensive. if #4 makes sense then the corruption thing will not be an issue

refining all our export is a s!lly idea as good as asking IOC's to build refineries, for the following reasons;

1 the IOC's and your govt are having fun with the chasm between cost of production and intl crude price, they will never add refining cost to their profit when they can export raw crude, even if your Govt decides as a matter of National importance, it is not in the interest of the IOC's and it will never happen.

2 from the unfolding events lately, your govt seems to rely on the IOC's magnanimity for the construction of the refineries which begs the question; who will construct the Refineries? at what cost? whose funding? (a) your Govt that needs it? (b) the IOC's whose interest it wont serve?, (c) your father?

3 should a miracle happen and refineries appear, where will they get their crude from and at what cost?

if you sincerely think in your wildest dream that SPDC will sell that crude below intl rate at which it is selling now, then you need deliverance from Sanusilaria

if you ever buy at that rate which you call "competitive" ie apar with intl crude price, then the faith of the refineries i mentioned above will be fall you within one year.

have you seen a copy of the MOU that IOC's use to supply gas to our turbines? the day you will set your eyes on it, you will understand the buisness model they are operating and why our electricity tarrif will be the highest in the world once we have steady electricity.

you might choose to recall that this same gas they are squeezing you with is the same they flare to the tune of $2.5b annually.

brother, i will not respond to you again if you fail to show me private or state owned refineries running on your model and will be breathing by 2015

"your model is thus; IOC's in conjunction with state drill in a JV and sell to a refinery (God will construct) at intl crude price all their crude then the products are sold in intl rates to make profit"

please correct me if i am wrong.

texazzpete:

Look who is calling someone an illiterate. What the heck is this? Please this is the POLITICS section here, we don't condone such 'txt speech' here.

DaLover: @Jp phillips
Thanks, likewise i wouldnt be needing a response from you, I can now see why beaf has total disregard for you, thanks and take care

truth4life:
Why we can’t build refinery in Nigeria-Shell
On March 2, 2012 · In News 3:00 pmTweet

Mr Malcolm Brinded, the outgoing Executive Director of Shell Petroleum Development Company (SPDC), says the company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Brinded, who is in-charge of the Upstream International unit of the company, made the statement in an interview with the State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell chief in Nigeria, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world.

“With respect to downstream, two comments there. Shell is divesting from refineries all over the world because there is a surplus of refineries; we no longer own any refineries even in the United Kingdom.

“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss.

“Which also means one can get refined products back again and pay very little for it to be refined,’’ he said.

Brinded said that building refineries was no longer profitable and that informed the company’s decision to invest in the gas sector.

According to him, Shell would continue to invest in the development of the gas sector, adding: “I do believe that investment in the downstream sector, especially gas sector in Nigeria, as I touched on, is very important.

“Nigeria has huge resources of gas that have yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.

“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.’’

Comments are moderated. Please keep them clean and brief.
http://www.vanguardngr.com/2012/03/why-we-cant-build-refinery-in-nigeria-shell/