Yes, Should the Federal Government prioritize refining of proven crude reserves over exploration for more crude like we are are currently witnessing?

Think about it;
If Dangote's refinery is promising to create at least 230,000 jobs, simple arithmetic show that his refinery's capacity is 650,000 bpd and govt produces around 2 million bpd.

That means the govt still have enough unprocessed crude to engage the equivalent of two Dangote-sized refinery.
That's about 700,000 jobs total on the line or 460,000 extra jobs the government can create should Nigeria decide to refine all her crude.

Now my question is this: why is the govt prioritizing discovery of oil above refining of that which has already been discovered ?

Don't you guys think the government is acting like a man gambling with his 'last card' instead of engaging the raw material he already has to make guaranteed profit?

Cc: Lalasticlala, mynd44

cc: Blue3k

mapet

Government might have given up on making the NNPC refineries work. We are all waiting for dangote refinery to come on stream

Nigerian politicians are not interested in anything than will benefit the commoners, they know the right todo

Standing5:
mapet

Posted @ 3.38am?

Meth......

The government already has made refining priority. They approved building of more refineries like Dangote and modular refineries all over ND. Buhari refused sell/concession state owned refineries so we're doing more turn around maintenance for the upteenth time. It's mainly a private sector effort the government is focusing on by trying to pass things like Petroleum industry bill and such supposedly.

Anyway like Mapet explained oil exploration is calculated risk. Geology speaking potential exist in Benue and Chad basin from what I researched. Neighboring countries found oil near those basins. Niger republic didn't find their oil till they got Chinese help after searching decades. Chad didn't find it till decades later as well.

Blue3k:
The government already has made refining priority. They approved building of more refineries like Dangote and modular refineries all over ND. Buhari refused sell/concession state owned refineries so we're doing more turn around maintenance for the upteenth time. It's mainly a private sector effort the government is focusing on by trying to pass things like Petroleum industry bill and such supposedly.

Anyway like Mapet explained oil exploration is calculated risk. Geology speaking potential exist in Benue and Chad basin from what I researched. Neighboring countries found oil near those basins. Niger republic didn't find their oil till they got Chinese help after searching decades. Chad didn't find it till decades later as well.

Bros,

If you did not come into this conversation, I would not have dignified it with any response. I consider responding to this guy a waste of my time. First and foremost he's immature, petty and pained, added to the fact that he's lacks candor and honor. I am persuaded to believe this very topic was opened out of spite rather than knowledge sake, but that aside I will put things into perspective. Permit me to do a fairly long elaboration of this conundrum.....

If anybody is familiar with the Oil and Gas industry/business, you should have realized that asking govt to invest in surface facility business like refinery is not only "patently ignorant“ but ridiculous to say the least. Refinery business is very complex, delicate and capital intensive, it requires so much expertise. Even the big oil giants, ExxonMobil, Shell, Total etc have offloaded their refinery businesses all over the world decades ago. Is it any wonder that we have not been able to put any of our current refineries on constant ops for 6 months stretch? OBJ realized the folly of govt investing, took a strategic decision and sold Kaduna refinery to Dangote, yet late Yar'Adua foolishly reversed it.

Kaduna refinery is about the most idiotic project in history. We played politics with something that made no sense. The pipeline to feed the refinery is almost 1000km away and cost of the pipeline to feed the refinery is more than the cost of building the refinery, not to talk of maintenance. PMB also did the foolish thing, asking Kachikwu to fix the refineries. Our refineries are outdated, old and weak. Each time we try to to put them in the market, the value decrease.....

Another issue is that the dynamics of refining changed with technology. New refineries has capabilities to refine heavy crude, sulphur which used to be waste is now valuable, these refineries are therefore able to extract more oil derivatives and gas liquids, giving more value. With this consideration, some countries are not bothered about building refineries, because they can move their crude to countries with sophisticated refineries. The nature of contracts structured in such a way that you either sell crude or pay tariffs. The tariff option is so popular giving traders flexibility to make sell in many ways.

FG is trying to exit its ownership of refineries as they are not capable of of running them. I won't be surprised if refineries top the list of assets that will be sold in 2018. FG had been muting the idea of private refinery a long time ago. Dangote is a late bloomer in this but because he's building the biggest and his financial muscles, that's why his is the most popular.

My summary on this is that

1. Literarily asking FG to build more refineries is ignorant and ridiculous. FG has no business in building more refineries

2. Should they encourage private refineries like Dangote and the likes? Absolutely..... but that is also not that simple. I am close to Dangote refinery project. It will overrun its deadline and will not come in at the promised time.


On exploration, it is conventional in oil and gas business to "find more oil". A typical oil and gas company that is not drilling exploration wells draws the ire of govt and risks his license to operate. The reason is that oil wells naturally decline and the sum effect is a reduction in production capacity of the company and consequently the country. While you enhance your current wells, you drill new ones for more oil.

At a national level, it is in the interest of the country to keep exploring to find more reservoir. In a successful find, it's more like you have opened the country to a new lease of economic empowerment. If $3b is what is currently spent, then it is contextually chicken change. That is just about the cost of 2 small assets. For example Shell paid Dan Etete/GEJ/Nigeria over $1b for the oil license in the Malabu scandal, which is just the cost for just 1 license ... You can now imagine a legal returns if Nigeria is selling license on multiple acreages in any of these basins in a successful find.

Exploration of new area is normally does not attract financial investment at the early stages like this as banks and finance institutions don't want to fund exploration phase becos of its high risk and the long time to recoup investments. They come in with funds, when you have an exploration success. That is why governments takes the burden of exploration. Govt in investing in exploration to discover reserves and once those researves have been proven, then the financiers come in, govt recover their costs thru signature bonuses, and other incentives and they make much more than they can spend.

I see a lot of ignorance in the public domain. How can people say oil is not a available in the north, when such is not backed up by seismic data? I took a guardian reporter on on twitter, when I saw a very unprofessional reportage about exploration in Chad, Benue and Anambra basins. She mentioned every other thing but what Nigeria stands to benefit. She down-played all the professional views of seasoned geologists and kept referring to "expert opinions" which are mostly from those who have little to do with oil business. I challenged Guardian by asking 7 questions bothering on the geology, the business, ROI to Nigeria, Capacity Development, Economy and Forex. Every other things discussed is about sectional politics and some ridiculous arguments about "wrong-timing".

If we find oil in any of these basins, it adds to our natural reserves. This heralds investments as Oil and Gas companies will start trouping in to take up the licenses. It addresses our financing problems for instance we could do infrastructure-for-oil exchange. CNOOC beat Shell to an investment deal in Angola in a new discovery. While Shell was making their "regular offer", CNOOC backed by the Chinese govt, added perks "Oil-for-Infrastructure" deal. They committed to build major high-speed rail lines for Angola at no cost (actually factored into the cost of oil). Do you think if we have additional oil, our borrowings will not reduce? We have a projected infrastructure spending of $100b for the next 50years. In this budget we could only allocate $50b, leaving us a $50b deficit. Those who argue to that we should leave oil are blind-sided.

My summary here is


FG should concentrate on exploration, as this is what guarantee our economic sustainability till we can meet the infrastructure deficit

@Mapet, no need getting unncessarily emotional.
In your points I honestly think you involved too many needless facts that don't apply to Nigeria.

If you argue that govt has no business building and running refineries then the govt equally has no business prospecting for oil via a state owned entity(NNPC). In fact it will be far more sensible for a private entity to prospect for oil - a gamble - than for a govt to prospect for oil.
The story of Nigerias first oil well, Oloibiri is there. Since I have been reading stuff at random I hardly hear of govt prospecting for oil. The covention is one oil magnate is always brainstorming and doing the gambling, the govt sits back, regulate, and eat the good. There may be tax window or other incentives for the discoverer of oil reserve correct me if I am wrong.

Desyner:
@Mapet, no need getting unncessarily emotional.
In your points I honestly think you involved too many needless facts that don't apply to Nigeria.

If you argue that govt has no business building and running refineries then the govt equally has no business prospecting for oil via a state owned entity(NNPC). In fact it will be far more sensible for a private entity to prospect for oil - a gamble - than for a govt to prospect for oil.
The story of Nigerias first oil well, Oloibiri is there. Since I have been reading stuff at random I hardly hear of govt prospecting for oil. The covention is one oil magnate is always brainstorming and doing the gambling, the govt sits back, regulate, and eat the good. There may be tax window or other incentives for the discoverer of oil reserve correct me if I am wrong.

NNPC has Exploration and Production Directorate which is charged to explore and monitor production and Nigerian Petroleum Development Company (NPDC) Ltd a fully-owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) which engaged in Oil & Gas Exploration and Production activities currently owns and operates many oil blocks. The search of crude oil in the interland basin might be politically motivated but no one can rule out its economical benefits, discovery of crude oil is not limited to or birthright of ND or Southern Nigeria, it is a global commodity that can be found in every part of the world be it swampy, dry, arid, desert or rocky part of the world sea inclusive, it tooks Ghana decades to discover crude oil in a very large quantity so is Chad and Niger, with the advent of new and improved technology reserves that are believed to be unrecoverable can now be exploited(shale, deep water, and tight gas) and improved prospecting technology.

realjoker:
NNPC has Exploration and Production Directorate which is charged to explore and monitor production and Nigerian Petroleum Development Company (NPDC) Ltd a fully-owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) which engaged in Oil & Gas Exploration and Production activities currently owns and operates many oil blocks. The search of crude oil in the interland basin might be politically motivated but no one can rule out its economical benefits, discovery of crude oil is not a ND or Southern Nigeria commodity it can be found in every part of the world be it swampy, dry, arid or rocky part of the world, it tooks Ghana decades to discover crude oil in a large quantity so is Chad and Niger.

@underlined, what for?
@bold, the economic benefits of oil refining are glaring enough and is being lost everyday we ignore it. The prospecting entity from what I know is always privates individuals. Why do you think PIB that's is suppose to propel private refineries is lanquishing with Aso Rock akara sellers and NNPC a state owned company is handling oil discovery if not politics?
I still don't see enough reason for the govt not to go into large scale refining if it can prospect for oil and even overall redundant refineries.

@realjoker

discovery of crude oil is not limited to or birthright of ND or Southern Nigeria, it is a global commodity that can be found in every part of the world be it swampy, dry, arid, desert or rocky part of the world sea inclusive, it tooks Ghana decades to discover crude oil in a very large quantity so is Chad and Niger, with the advent

Crude oil discovery wasn't handle by NNPC for a start in the south. Let the govt hands off oil discovery for privates hands who can make fairer jugdment without political influence.

Desyner:
@realjoker
Crude oil discovery wasn't handle by NNPC for a start in the south. Let the govt hands off oil discovery for privates hands who can make fairer jugdment without political influence.

This happen when the entire world with the exemption of UK, US and few others has no technical know how of oil exploration and production, and not now that we can explore, develop and produce on our own with little contribution of outsiders( West)

Desyner:

@underlined, what for?
@bold, the economic benefits of oil refining are glaring enough and is being lost everyday we ignore it. The prospecting entity from what I know is always privates individuals. Why do you think PIB that's is suppose to propel private refineries is lanquishing with Aso Rock akara sellers and NNPC a state owned company is handling oil discovery if not politics?
I still don't see enough reason for the govt not to go into large scale refining if it can prospect for oil and even overall redundant refineries.

The underlined is meant for this

govt equally has no business prospecting for oil via a state owned entity(NNPC). In fact it will be far more sensible for a private entity to prospect for oil - a gamble - than for a govt to prospect for oil.
The story of Nigerias first oil well, Oloibiri is there. Since I have been reading stuff at random I hardly hear of govt prospecting for oil.

Claiming that you hardly hear about government prospecting for oil tells how ill inform you are about Nigeria oil industry, the only real procurement contractual part of the Kachhikwu, Baru outburst are exploratory projects between NNPC and its JVs to increase Nigeria crude oil reserves by 2.66 billion barrels and gas reserves by 4083bcf project falcon and project santolina at the cost of 1.87 billion dollars

Desyner:

the economic benefits of oil refining are glaring enough and is being lost everyday we ignore it. The prospecting entity from what I know is always privates individuals.

The government has 4 mismanaged refineries that can refine more than what we consume if revitalise, there are multiple new planned and ongoing refineries projects in the country that will bring up the nation refinery capacity to 5 folds of what we currently consume together with the revitalised government owned refineries.

Why do you think PIB that's is suppose to propel private refineries is lanquishing with Aso Rock akara sellers and NNPC a state owned company is handling oil discovery if not politics?
I still don't see enough reason for the govt not to go into large scale refining if it can prospect for oil and even overall redundant refineries.

on the bolded.... Hope I am not dealing with a bot because it's only Nairaland bots that are fond and known of using all these balderdash lines like akara sellers, kunu sipping, gorochewing bastard etc?

realjoker:
The underlined is meant for this Claiming that you hardly hear about government prospecting for oil tells how ill inform you are about Nigeria oil industry, the only real procurement contractual part of the Kachhikwu, Baru outburst are exploratory projects between NNPC and its JVs to increase Nigeria crude oil reserves by 2.66 billion barrels and gas reserves by 4083bcf project falcon and project santolina at the cost of 1.87 billion dollars

I hope you are not mapet hiding under new handle to go the usual route.
If you know anything about what you typed trash about you would have observed that the first commercial oil well discovery in Nigeria was done by private individual, Shell.
The trend remains the same all over the world.
If you have nothing constructive and sensible to say no need going petty.

You're right. But nothing wrong in asking for more.

Desyner:
I hope you are not mapet hiding under new handle to go the usual route.
If you know anything about what you typed trash about you would have observed that the first commercial oil well discovery in Nigeria was done by private individual, Shell.
The trend remains the same all over the world.
If you have nothing constructive and sensible to say no need going petty.

national government oil owned companies According to the World Bank accounted for 75% global oil production and controlled 90% of proven oil reserves in 2010 the likes of Petrobras, ENI (established by law decree), Saudi Aramco, Rosneft, Abu Dhabi National Oil Company, National Iranian Oil Company, China National Petroleum Corporation, Kuwait Petroleum Corporation, Petroleos de Venezuela, Emirates National Oil Company, Abu Dhabi National Oil Company, Iranian Offshore Oil Company, National Iranian Oil Company, Oil India, Sinochem, Sinopec, PetroChina (CNPC), CNOOC, Petróleos Mexicans and many more are all state owned oil companies that are into exploration, development and production, refining and processing, distribution and retailing of crude oil, gas and its derivatives.

realjoker:
national government oil owned companies According to the World Bank accounted for 75% global oil production and controlled 90% of proven oil reserves in 2010 the likes of Petrobras, ENI (established by law decree), Saudi Aramco, Rosneft, Abu Dhabi National Oil Company, National Iranian Oil Company, China National Petroleum Corporation, Kuwait Petroleum Corporation, Petroleos de Venezuela, Emirates National Oil Company, Abu Dhabi National Oil Company, Iranian Offshore Oil Company, National Iranian Oil Company, Oil India, Sinochem, Sinopec, PetroChina (CNPC), CNOOC, Petróleos Mexicans and many more are all state owned oil companies that are into exploration, development and production, refining and processing, distribution and retailing of crude oil, gas and its derivatives.

Same pattern. You churned out cool stats and fact but seem you forgot to include the fact that showed what percentage of those output were discovered by Govt vs Private. Also the stats showing who refined what.
Nice try. Keep it up.

Desyner:
@Mapet, no need getting unncessarily emotional.
In your points I honestly think you involved too many needless facts that don't apply to Nigeria.

If you argue that govt has no business building and running refineries then the govt equally has no business prospecting for oil via a state owned entity(NNPC). In fact it will be far more sensible for a private entity to prospect for oil - a gamble - than for a govt to prospect for oil.
The story of Nigerias first oil well, Oloibiri is there. Since I have been reading stuff at random I hardly hear of govt prospecting for oil. The covention is one oil magnate is always brainstorming and doing the gambling, the govt sits back, regulate, and eat the good. There may be tax window or other incentives for the discoverer of oil reserve correct me if I am wrong.

If you are going to make an argument, why not commit to making arguments that don't beggar logic? You want to show you're knowledgeable in Oil business but you make submissions that are so ridiculous. How can you argue that "..... then the govt equally has no business prospecting for oil via a state owned entity(NNPC)" . You can do yourself a lot of good, Google NNPC, know how it's set up before making statements that gives you away.

You have been reading stuffs at random you claim, yet you demonstrate shallow understanding of how oil exploration in Nigeria works. You keep conjuring stuffs...... "one oil magnate brainstorms and gambles"...... and that is how oil exploration is done to you?

Desyner:
@Mapet, no need getting unncessarily emotional.
In your points I honestly think you involved too many needless facts that don't apply to Nigeria.

If you argue that govt has no business building and running refineries then the govt equally has no business prospecting for oil via a state owned entity(NNPC). In fact it will be far more sensible for a private entity to prospect for oil - a gamble - than for a govt to prospect for oil.
The story of Nigerias first oil well, Oloibiri is there. Since I have been reading stuff at random I hardly hear of govt prospecting for oil. The covention is one oil magnate is always brainstorming and doing the gambling, the govt sits back, regulate, and eat the good. There may be tax window or other incentives for the discoverer of oil reserve correct me if I am wrong.

If you are going to make an argument, why not commit to making arguments that don't beggar logic? You want to show you're knowledgeable in Oil business but you make submissions that are so ridiculous. How can you argue that "..... then the govt equally has no business prospecting for oil via a state owned entity(NNPC)" . You can do yourself a lot of good, Google NNPC, know how it's set up before making statements that gives you away.

You have been reading stuffs at random you claim, yet you demonstrate shallow understanding of how oil exploration in Nigeria works. You keep conjuring stuffs...... "one oil magnate brainstorms and gambles"...... and that is how oil exploration is done to you?

mapet:


If you are going to make an argument, why not commit to making arguments that don't beggar logic? You want to show you're knowledgeable in Oil business but you make submissions that are so ridiculous. How can you argue that "..... then the govt equally has no business prospecting for oil via a state owned entity(NNPC)" . You can do yourself a lot of good, Google NNPC, know how it's set up before making statements that gives you away.

You have been reading stuffs at random you claim, yet you demonstrate shallow understanding of how oil exploration in Nigeria works. You keep conjuring stuffs...... "one oil magnate brainstorms and gambles"...... and that is how oil exploration is done to you?

I looked and looked at this comment to see where I can reply anything concrete and I found none.
I assume you have no strong argument justifying why govt should prioritize oil discovery above refining.
Aside oil we have other resource. Our problem has always been utilizing the resource locally. If you have something sensible to say, the floor is wide open.

Desyner:
I hope you are not mapet hiding under new handle to go the usual route.
If you know anything about what you typed trash about you would have observed that the first commercial oil well discovery in Nigeria was done by private individual, Shell.
The trend remains the same all over the world.
If you have nothing constructive and sensible to say no need going petty.

Lay of your crude idi.ocy. How is it that when people expose your shallowness, you accuse them of being Mapet? is Mapet hunting you in your dreams?

In the last half a century, oil exploration and licensing business model has changed more than 3x globally, yet you refer to Shell-olobiri, which you even got muddled up, as the business model currently in operation today?

It will be more honorable to simply admit that you are not knowledgeable in this area, that foolish arguments

mapet:


Lay of your crude idi.ocy. How is it that when people expose your shallowness, you accuse them of being Mapet? is Mapet hunting you in your dreams?

In the last half a century, oil exploration and licensing business model has changed more than 3x globally, yet you refer to Shell-olobiri, which you even got muddled up, as the business model currently in operation today?

It will be more honorable to simply admit that you are not knowledgeable in this area, that foolish arguments

That's what many user aacount on Nairaland does. How come I don't hop from one account to another or what's chasing you from one account to another ? . . . l o l

Desyner:
That's what many user aacount on Nairaland does. How come I don't hop from one account to another or what's chasing you from one account to another ? . . . l o l

Lwkmd, I am not mapet, take off the chaff from your eyes. FG prioritise local refining of crude oil than searching for crude oil in the hinterland basins only fifth columnist like you are the only people that believes FG prioritise search for crude oil in the hinterland basin ahead of local refining.

Desyner:
That's what many user aacount on Nairaland does. How come I don't hop from one account to another or what's chasing you from one account to another ? . . . l o l

Keep ranting like an immature kid. What is my business or yours with ppl having many user accounts? If you choose to do so it is not my bother, you telling me you don't is also irrelevant to me. If you have good stuffs, I will respect it from the quality of your submissions. That's why I am not always disposed to have any conversations with you, because it ends up being counter-productive

mapet:


If you are going to make an argument, why not commit to making arguments that don't beggar logic? You want to show you're knowledgeable in Oil business but you make submissions that are so ridiculous. How can you argue that "..... then the govt equally has no business prospecting for oil via a state owned entity(NNPC)" . You can do yourself a lot of good, Google NNPC, know how it's set up before making statements that gives you away.

You have been reading stuffs at random you claim, yet you demonstrate shallow understanding of how oil exploration in Nigeria works. You keep conjuring stuffs...... "one oil magnate brainstorms and gambles"...... and that is how oil exploration is done to you?

Mr Google. I hail oh.

realjoker:
Lwkmd, I am not mapet, take off the chaff from your eyes. FG prioritise local refining of crude oil than searching for crude oil in the hinterland basins only fifth columnist like you are the only people that believes FG prioritise search for crude oil in the hinterland basin ahead of local refining.

The more you try the more you expose yourself

Desyner:

realjoker:
Lwkmd, I am not mapet, take off the chaff from your eyes. FG prioritise local refining of crude oil than searching for crude oil in the hinterland basins only fifth columnist like you are the only people that believes FG prioritise search for crude oil in the hinterland basin ahead of local refining.

The more you try the more you expose yourself

@realjoker,

I suggest you ignore the daft thing. Once anyone takes him to the cleaners, he looks for petty and stup. I'd lines and accusations. He will hardly focus on discussions because he's empty

mapet:


@realjoker,

I suggest you ignore the daft thing. Once anyone takes him to the cleaners, he looks for petty and stup. I'd lines and accusations. He will hardly focus on discussions because he's empty

Who did you take to the cleaners?

If you know one or two things about focusing on discussion you should have stuck to the simple question the thread raised instead of trying to google things that are beyond your reasoning capacity on-the-fly.

So in your opinion it is better the government prospects for oil and lost the chance to employ an estimated 460,000 Nigerians. Your brain ought to have told you that those state owned oil companies you presented as being responsible for crude discovery have good refining arrangement in place for their output. In Nigeria we are battling unemployment but some people think it is cool to prioritize the discovery of crude that may not even exist above refining of that which we already have in excess and will employ hundreds of thousands.

The fact that you will prefer to try and play the devil's advocate just to spite me shows the stuff you are made of. Keep googling stuff on-the-fly and forming sophisticated babe. More grease to your elbow.

realjoker:
Lwkmd, I am not mapet, take off the chaff from your eyes. FG prioritise local refining of crude oil than searching for crude oil in the hinterland basins only fifth columnist like you are the only people that believes FG prioritise search for crude oil in the hinterland basin ahead of local refining.

Any evidence to support this ? Or this is just a subtle way of you backtracking on your initial stance?

Desyner:
Who did you take to the cleaners?

If you know one or two things about focusing on discussion you should have stuck to the simple question the thread raised instead of trying to google things that are beyond your reasoning capacity on-the-fly.

So in you opinion it is better the government prospects for oil and lost the chance to employ an estimated 460,000 Nigerians. Your brain ought to have told you that those state owned oil companies you presented as being responsible for crude discovery have good refining arrangement in place for their output. In Nigeria we are battling unemployment but some people think it is cool to prioritize the discovery of crude that may not even exist above refining of that which we already have in excess and will employ hundreds of thousands.

The fact that you will prefer to try and play the devil's advocate just to spite me shows the stuff you are made of. Keep googling stuff on-the-fly and forming sophisticated. More grease to your elbow.

1. Apart from me, every other person has taken you to the cleaners. These people engage in discourse with you logically, they also back it up with evidence. They have demonstrated a commitment to diligent study and quest for knowlege.....and it shows in the quality of their submissions. Can that be said of you? Nope. You have no intellectual content, you just throw mumbo-jumbo stuffs around, argue blindly and when found out you resort to pettiness.

2. . With your "Kaduna-Teacher" English, you cannot rationalize that refineries can only continue to exist when you sustain your oil reserves.

3. Spite you? Don't get over yourself, you've already given yourself away as simply a noise maker.....I can only encourage you to continue at what you do best........at least NL needs comic reliefs like you sometimes