[b][b]

oyb:

the federal government is just a bunch of jokers

they have not done the first thing that is required - create a conducive/enabling environment and the idiots are making noise

have you ever wondered why there are no shell petrol stations in nigeria? [/b][/b]

lets even forget the business case, would i build a refinery in nigeria, knowing the state of the niger delta, the state of phcn, and the crzy governemnt that keeps revoking agreements of previous administrations?

Why the ranting? Noise maker…when is the inception of the Niger Delta militancy? do we have Shell petrol stations before then? they actually caused the Niger delta crisis with the indirect killing of Saro-Wiwa, don't be fooled Shell are only interested in exploiting us, but of course if they are not ready to build a refinery , they can leave. They don't want any investment on ground, they are only interested  in exploiting us.

It won't work - they can bully the likes of Shell, Chevron, Exxon and Eni, but the smaller operators will still continue with business as usual. Even the big IOC's won't build refineries at a point when they are reducing refining capacity worldwide except for in China.

The best thing the FG can do is force them to take over the existing refineries and manage them on behalf of the FG - we don't need to build new refineries and can simply expand the ones on the ground. Again, this is more posturing from the government - the deals signed by OBJ supposed to force oil companies to engage in infrastructure development fell flat. . . this one is likely to go the same way.

rethink:

^^^^^^^^^^^^^^^^^^^^^

This is not a foreigner vs Citizen issue.

if you want to renew your oil block then build refineries in Nigeria if not leave our(their) oil alone.

Dream on - Exxon has renewed 3 shallow licenses for 20 years without any commitment to refining. Again, the problem is not building refineries - if we sold off the existing four refineries and deregulated they would be expanded and supply what we need. The officials are just posturing and nothing more.

yeswecan:

[b][b][b]
Why the ranting? Noise maker…when is the inception of the Niger Delta militancy? do we have Shell petrol stations before then? they actually caused the Niger delta crisis with the indirect killing of Saro-Wiwa, don't be fooled Shell are only interested in exploiting us, but of course if they are not ready to build a refinery , they can leave. They don't want any investment on ground, they are only interested  in exploiting us.

keep misyarning  and whining - companies are in business to make a profit.

Let the delusions continue - you CANNOT dictate the economic direction of the IOC's - if it is unprofitable they will pull out. . . with the ND instability they might still pull out anyways.

yeswecan:

[b][b][b]
Why the ranting? Noise maker…when is the inception of the Niger Delta militancy? do we have Shell petrol stations before then? they actually caused the Niger delta crisis with the indirect killing of Saro-Wiwa, don't be fooled Shell are only interested in exploiting us, but of course if they are not ready to build a refinery , they can leave. They don't want any investment on ground, they are only interested  in exploiting us.

Can you quit being ignorant? Shell has no investment but is one of the largest shareholders in the LNG plant. They have no investment but are involved in Afam power station generating 650 MW of power. Yes they are only interested in 'exploiting' you when YOU receive 85% of the profits and squander it.

Focus on the ineptitude of the Nigerian state - it is completely incapable of managing it's resources. That will not change even if you force oil companies to build refineries - they will either sabotage them or frustrate them by preventing their start up.

finally they have started thinking

so the Nigerian Government is finally admitting its colossal failures, eh?
I dunno, it seems somewhat morally grey to force oil companies to go into crude refining. These companies are set up to make profit - they owe that to their shareholders. It should be determined that the project is actually commercially viable before making it mandatory.
So what next? Force all the oil companies to provide electricity and education?

lol @ someone demanding that licenses be given for only 2 year periods.
If you owned a company and were given a license for only 2 years, would you invest heavily in the facility development for that project?

This is just another woolly policy, but hey, most of us get content with a little wool (especially if coated with crocodile prayers).
Practically all oil producing countries do the majority of oil drilling themselves, how near is NNPC to drilling oil?
Practically all oil exporting countries maximise their profit by building refineries in customer countries, how near is NNPC to managing a single refinery properly?

The question should not be about whether oil companies are forced to build refineries here to cover up for our own failures; we should be asking what needs to be done so that the cabals and other reasons our refineries failed are not projected on any new ones (regardless of who builds them); we should be asking if states that hold oil reserves should not be allowed to build refineries; we should be asking why the vast majority of tooling and equipment for oil drilling is not produced in Nigeria.

texazzpete:

so the Nigerian Government is finally admitting its colossal failures, eh?
I dunno, it seems somewhat morally grey to force oil companies to go into crude refining. These companies are set up to make profit - they owe that to their shareholders. It should be determined that the project is actually commercially viable before making it mandatory.
So what next? Force all the oil companies to provide electricity and education?

you no good scrooge - what about housing, transport infrastructure, health services, potable water, feeding allowance - that is their duty - the role of the fg is to er er er well maybe apologists like yeswecan can tell us

texazzpete:

so the Nigerian Government is finally admitting its colossal failures, eh?
I dunno, it seems somewhat morally grey to force oil companies to go into crude refining. These companies are set up to make profit - they owe that to their shareholders. It should be determined that the project is actually commercially viable before making it mandatory.
So what next? Force all the oil companies to provide electricity and education?

I don't think it's morally grey in principle - Nigeria must negotiate the best possible deal for itself.
If the oil companies can be persuaded to build and operate refineries and make that a pre-condition for their oil licenses, the economics can be brought into consideration. I personally don't think Shell for one will buy into this - in their Q3 analysis they are getting rid of 600,000 barrels/day refining capacity worldwide (more than Nigeria's installed capacity) so it will be interesting to see how it goes.

What would be wiser is to sell off some of the NNPC equity in the joint ventures to the Chinese, with the caveat that they come in, build and run refineries and power stations on our behalf.

Sadly the government isn't serious enough to even manage something as simple as fuel importation without causing periodic scarcity.

As always the government is eager to play to the gallery by blaming the oil companies for the refining issues, while the FG is still collecting the overwhelming bulk of profits from oil and gas exploitation.

FG is simply clueless.
So 'cos FG wants 2de-regulate the downstream sector and make it seem that they care 4the masses, they now compel oil companies 2set-up refineries.
This only points 2the colossal failure of the FG.
In the oil industry, there is a sort of division of labour.
The oil companies drill 4 crude oil (despite the unfavourable environment and economic policies coupled with militancy in the ND).
DPR, PPMC and the rest perform their varìous roles to @least appreciable extents.
But NNPC, saddled with crude refining and also to assist the oil companies in their drillìng 4crude has done little or nothing in their regard.
4 refineries under them produce a little above 5% of their installed capacity.
Now because NNPC have bluntly refused 2make the refineries work, FG is now compelling oil companies to build refineries and is setting it as a pre-requisite 4renewal of oil licenses.
Which of these oil companies have refining attach'd 2their names.
I only know of two: exploration and producing.

Is it not undemocratic for Government and the people of Nigeria ti keep forcing private companies to waste their money on soon-to-be failed projects. If you own a private business, then you can imagine what it feels like for there to be a change of policy which requires you to dole out about $1 billion and about 2 years of your precious time on a non-profit infrastructure.

With the removal of subsidy, it is the Oil Companies that will be begging the government and paying huge license fees to build refineries. Let's stop this dictatorship attitude where we just wish the government will pass on all of out needs to the oil companies. So when there's a food crises next time, will the government force the oil companies to cultivate farmlands? Make the construction of Refineries profitable by removing the chains of subsidy and then you will see oil companies you've never heard of in this world will be falling over themselves trying to get a license to build a refinery.

I should stop here, but lemme give the example which no one has stopped giving ever since. When the GSM companies came to Nigeria, a NITEL local call within Lagos was about N2.50 and a NITEL trunk call from Lagos to Kaduna was about N17.00 . Then the GSM companies came and charged N50.00 for any call, whether local or trunk call. They didn't make international calls and when they attempted it, it was above N100.00 .

The GSM companies sold SIM packs and made money among the elite, but they noticed that people weren't really making calls. Why would anyone call within Lagos a minute for N50.00 when they can as well use a landline to call 2 minutes for N5. At this point, ECONET and MTN had to call on the Federal Government and NCC to deregulate totally. Within a few days, a call within Lagos had become between N5 to N10 and a trunk call to Kaduna was N40. That was when it started making sense to open up call centres with GSM phones and as competition came in and the customers continued to put pressure on the GSM companies, today we can make GSM calls to Kano for about N25 and call abroad for about N50.

Why can't we agree to do the same with Petroleum and Power? Why do we want to continue suffering under this subsidy. Today oil marketers cannot import as much product as they want or as they have the ability to import, they import as much product as the NNPC is willing to subsidize. So if there's scarcity of Petrol and Kerosene and the Nigerian market needs 2 million litres of Petrol and 2 million litres of Kerosene, even if the marketers have the funds and facilities to import 4 million litres of Petrol and 4 litres of Kerosene, but NNPC says it only will subsidize 1 million litres of Petrol and 1 million litres of Kerosene, then the marketers have no choice than to reduce the amount of product they will import. It is that simple. SUBSIDY PUNISHES US!

Finally, we are thinking. the major reason that the IOC's are not investing is because it is easier to make money from exportation with their present investments. Initially refineries were no go areas for them, and with MEND and NUPENG/PENGASSAN wahala, it will be too many headaches.

ah good move,someone is thinking, take a look at teh US and UK, all Oil companies have thier own refinaries ,I think this president is catching up,I just wish he would be faster and deregulate the sector so that these Mega companies would realise there is money to be made.

@Nex

With the removal of subsidy, it is the Oil Companies that will be begging the government and paying huge license fees to build refineries. Let's stop this dictatorship attitude where we just wish the government will pass on all of out needs to the oil companies.

Nex I thought the same sometime ago but when i saw that the oil companies dont care about Nigeria. Now understand this the NNPC and the cabal will never agree. They have been programmed to rob Nigeria dry.

Please I will ask you
The NNPC since its inception which oil field/block does it have?
The refinery 4 of them what happened that they ran down?
Just say you want to sell the refinery see what will happen.
Dangote had to return the refinery back.
The only Credible stranglehold the NNPC has on NIGERIA IS THE REFINERY AND THE PRICING OF OIL WITH THE SUBSIDY COMPONENT .

Notice that the want to remove subsidy the NLC is active
Notice if they want to sell refinery the NLC is active
If the companies could make the NLC strike they would.

We need to remove the subsidy but at what price would they sell?

NLC that have members that are millionaires from oil subsidy will swing into action when you remove subsidy. i just cant imagine a government like Nigeria paying for oil for the rich this is fraud and robbery.


yes remove subsidy by deregulization but be ready to face the Parasitic elite that all they life they have made free money on Subsidy.  If people in the NNPC were righteous people there will be no need for all this thinking.


JUST TELL ME WHICH OIL FIND HAS THE NNPC ACHEIVED?
YOU THINK THE NNPC ARE ANGELS? THEY WOULD GET OIL FIND AND FLOAT PRIVATE COMPANIES AND GO INTO JOINT VENTURE WITH NNPC THAT WERE RESPONSIBLE FOR FINDING THE OIL, WHAT DO YOU WANT THE FG TO DO SHOOT THEM? NIGERIANS KEEP SAYING OUR LEADERS ARE BAD BUT WE THE CITIZENS ARE THE BIGGEST THIEVES AND UNLESS WE REPENT THERE IS NO WAY OUT!

The poor is paying for the rich enough is enough!

The problem with Nigeria is that,we are short sighted and at most sentimental when making critical decisions.I remember that sometime in 2007,Mr.Aliko Dangote wanted to buy these non-functioning refineries people cried foul. Now 2yrs after we are going back to that same process.Do you know what time we have lost?.That is if the process will go ahead.

@QUOD

Please qualify the "WE" very well. I was happy when the dead refinery was sold to dangote. Those refinery should be dashed to Ojukwu and the Niger delta militants i dont care that is a scam tool of the NNPC.

The NNPC are lying through its teeths when they said they would refine the crude oil. Can you imagine it is Cheaper to import crude oil than to refine crude oil.

If we were gorillas living in the jungle some leading gorillas would have been executed but thank God it is not so. The NNPC will live to see that they were criminals their sin will ever be infront of them.

The NNPC are the ones that hide under all sort of names they are the ones. The NNPC is a fraud university take away the refinery from them and give them the power to regulate the private companies alot of people will leave the NNPC.

I dont know where we get the impression that these companies will dust their rigs and bags and leave. No way. Naija with the best crude in the world and these companies have massive investments in Nigeria. Venuzuela increased oil loyalties from 1% to 16.6% and these companies are still doing business over there
The trade-off would be to commit to build a refinery and u sign a 10/20 year lease in order to recoup your investment. Then on the other hand, if u opt out, you go yearly on your lease, but Naija has to peg yearly renewals to cost of inflation. Also why is it that Shell and Exxon have refineries in Saudi Arabia with  Saudi Aramco where petroleum products are cheaper? Finally , we have not taken into account that  about 300K barrels  are allocated to NNPC daily  for local consumption? Maybe new refineries coming on stream should get a chunk of that allocation in relation to their installed capacity.

adconline:

I dont know where we get the impression that these companies will dust their rigs and bags and leave. No way. Naija with the best crude in the world and these companies have massive investments in Nigeria. Venuzuela increased oil loyalties from 1% to 16.6% and these companies are still doing business over there

Which companies are doing business there? Most have left and are no longer investing - Venezuela's production is dropping due to their appropriation of foreign assets. The royalties in Nigeria are already high, so what is the issue here? Even if your crude is the 'best in the world', lots of crude is emerging from Angola and other countries - we are no longer as unique as we were.

The trade-off would be to commit to build a refinery and u sign a 10/20 year lease in order to recoup your investment.
Then on the other hand, if u opt out, you go yearly on your lease, but Naija has to peg yearly renewals to cost of inflation.
Finally , we have not taken into account that  about 300K barrels  are allocated to NNPC daily  for local consumption? Maybe new refineries coming on stream should get a chunk of that allocation in relation to their installed capacity.

Good question - the Shell refinery in Saudi Arabia is a 50-50 joint venture with Saudi Aramco and is a strictly EXPORT refinery. Have we even met local supply before we start looking at what others are doing? Please note that Shell's refinery was built in 1985 (A few years after Kaduna came on stream) and was expanded later on - while we were busy wasting time.

Again, the Exxon refinery in Saudi was built in 1984 and is a 50-50 JV with Aramco - this is also an EXPORT refinery. So what parallels are being drawn here?

Nigeria is unstable, insecure and has no infrastructure - Saudi has all these and therefore is attracting investment. Till we sort out the basic issues out, we are wasting our time.

Good thinking 4rm the FG. But in addition, this should be achieved b/4 we talk of Deregulation

let see it done first b4 rejoicing?

My people perish for lack of knowledge. So if the government actually implements this, some Nigerians will rejoice? Heaven help us.

Those of you who own private business should be able to understand what it feels like when you have borne you costs, paid your staff, your taxes and everything, only for the Federal or State Government to impose a huge unseen cost on you such as constructing the road on which you located your company.

Shell is a private company, it has signed agreements with the Nigerian Government and there are clear cut cost which it would bear annually and taxes which it should pay. After all they've lost because of the militancy, why should we now impose unseen costs on them.

Shell was the first company to build a refinery in Nigeria when it was still profitable to own a refinery. Did anybody beg them to build a refinery? Did anybody force them to build refineries? No! They built it because it is the business they are into. Then the government came and took over the refineries and the stupid military men wanted to hear the people sing their praises and the set unrealistic prices which brought in subsidy. Since then, we have not freed ourselves from the problems of scarcity, hoarding, TAM, strike, black market and adulterated products.


Instead of forcing companies to build non-profit refineries, why not do the right thing and stop fixing prices for them, make their business profitable and they will invest. They will even happily pay hundreds of millions of dollars just to acquire a license.


This "by force" building of refineries will only increase corruption, laziness, dictatorship, deterrence of foreign investment, bribery, and diversion of products to other countries.


In 2007, we discussed it here on Nairaland when Bluestar (Dangote et al) wanted to buy the refineries. I said it was best the Nation "dashed" him the refineries so that we have products. Today Nigerians still have their refineries, where are the Petroleum Products!!!

Daily Champion (Lagos)
Nigeria: FG Seeks Venezuela's Investment in Refineries

Adelani Ashamu

25 November 2009

Abuja — Federal Government yesterday sought for Venezuela's investment in Nigerian's refineries as part of efforts to achieve successful deregulation in the downstream petroleum subsector.

Information and communication minister, Prof. Dora Akunyili while receiving the Venezuelan Ambassador, Enrique Fernando Arrundell said it was time for the Venezuela investors to come to Nigeria and invest in the building of refineries given the success achieved by Venezuela in her deregulation and refinery construction.

She said Nigeria and Venezuela has a healthy bi-lateral relations which should necessarily make Venezuela investors to take advantage of Nigeria's deregulation policy in the area of building refineries. According to Akunyili "with more investment into refinery building by foreign investors we feel it would create a level-playing ground and thereby bring down the price of petroleum products. "

Responding, the Venezuelan ambassador in Nigeria, Enrique Fernando Arrundell said while it is important for foreign investors to take advantage of the on-going deregulation policy in Nigeria it is equally important for the government to engage her credible business merchants in the process.
Relevant Links

Sharing the Venezuelan experience which is a member of the Organization of Petroleum Exporting Countries (OPEC), he said Nigeria should take a cue from Venezuela by ensuring that her petroleum products after deregulation is made available to her citizens at affordable prices.

The ambassador said there is no doubt that with good an efficient refinery system Nigeria's deregulation would be applauded by all and sundry because it would have ensured that importation of products would be reduced and thus save foreign exchange for the country.

It would be recalled that the present administration since assumption of office expresses its willingness to pursue the deregulation policy as a step to reform the petroleum downstream sector and as such has been working hard to ensure its accomplishment.

http://allafrica.com/stories/200911250365.html

First of all they should remove the subsidy and allow market forces to determine the prices of PMS, diesel and aviation fuel.

When this happens the management of companies in the oil industry would be best placed as to determine whether they should continue to import fuel or on the other hand refine locally produced crude.

There is no amount of arm-twisting by the trade unions that can change this.

@rethink

You never thought of this because this idea is extremely silly and childish.

How can you punish private entities for the failures of the Government? Will you like to be sent to jail when an NPA Chairman launders money?

Do you know what NNPC staff will do to these companies after they finish building the refineries? Look at virgin Nigeria, do you know what problems the dead staff of the defunct Nigeria Airways put Richard Branson through before he could finally put that thing back in the air? Now where is virgin Nigeria? Has the government not seized it back and renamed it Super Eagles or some stupid name like that? Where is it going to end? FAILURE!

Now as yourself what the nature of investment that Virgin Atlantic put into that project that our government has now thrown into via garbage can. Virgin Atlantic was investing more than they were making because they were investing in the future and not in the present. The future where they will reap the investments which they made in terms of infrastructure, time, public relation, aircraft, winning customers' loyalty, that future is about to come and we just took everything back to square zero. Eagle Square Air or whatever rubbish they call it is now en route failure.

How can we mandate our government to continue ripping private industries off? Some say that because Shell or Chevron has massive infrastructure on ground, they won't leave. Of course they can't leave, but they can sponsor a military coup or a civil war and bring in a Junta or Rebel Lords whom they can work with. We forget that most civil wars and coups in Africa are sponsored by foreign private businesses with approval of the government of their home country.

Why was the son of the former Prime Minister of Britain coordinating an overthrow of the Government of Equatorial Guinea? Why did MEND blow up the Presidential Palace of Equatorial Guinea? Because some oil companies are paying to install a government which is more cooperative.

In a nutshell for there to be progress in the downstream sector of the petroleum industry the FGN has no choice really but to call the bluff of PENGASSAN and NUPENG.
This proposed measure does not cut it but rather plays to the gallery.

which companies are doing business there? Most have left and are no longer investing - Venezuela's production is dropping
due to their appropriation of foreign assets. The royalties in Nigeria are already high, so what is the issue here? Even if
your crude is the 'best in the world', lots of crude is emerging from Angola and other countries - we are no longer as
unique as we were

Its called the cost doing business , which is factored in any major business decision when engaging in a business venture. The point here is that these companies have had long established business relationship with Nigeria, so asking them to build a refinery is not asking them  to donate a refinery,cos they will build, own, distribute and make profit. 
Venezuela nationalized oilfields and some of the companies left or threatened to leave, but increasing loyalties did not make them leave.

Shell refinery in Saudi Arabia is a 50-50 joint venture with Saudi Aramco and is a strictly EXPORT refinery. Have we even
met local supply before we start looking at what others are doing?  Please note that Shell's refinery was built in 1985

This should be another reason why  oil companies should jump at it because its going to be 100% owned and operated by these oil companies. More so, it should be the reason why they should be rewarded with a 20yr lease in order to recoup their investments and lock prices.

r]
Nigeria is unstable, insecure and has no infrastructure - Saudi has all these and therefore is attracting investment. Till we sort out the basic issues out, we are wasting our time

Thomas Friedman of Foreign policy  writes in petropolitics that oil business isn't necessarily in bed with good government and stability. These companies are doing business in Nigeria, if they had an option of choosing between Abacha and a transparent govt, they would choose Abacha 100%. I had talked  to an oil man who told me how easy it was during Abacha's tenure to do oil deals in Nigeria. He would always come to  the negotiation table with Rolex wrist  watches and padded shoe socks with American 100 dollar bills. oil business is murky anywhere, that's why oil companies are rushing to get oil deals in Iraq despite  its political instability. Nigeria is still a factor in oil business, Angola is not an alternative-maybe in the foreseeable future. Any time there is an attack on Nigerian oil systems it reverberates globally on commodity markets.
Like I said  earlier, allocation of about 300K bpd will make it profitable for any company that ventures into this initiative.

Actually countries like Venezuela and Saudi Arabia have government controlled companies which have a proven track record as far as production refining and distriution of fuel is concerned. So to some extent that does give their governments some leverage. when bargaining with the intenational companies. The NNPC do things very differently.

So the FGN cannot really afford to further antagonise the oil sector.

_{First of all they should remove the subsidy and allow market forces to determine the prices of PMS, diesel and aviation fuel.}
How can u subsidize what belongs to Nigeria? The point is that NNPC  gets daily allocation of 300K at below market prices. Petroleum in Naija is not  like  GSM cos MTN , GLO , ECONET had to build their gateways and only NCC could grant license and NCC as statued is not a competitor and umpire, but NNPC is an umpire and a competitor. Deregulation should start with dissolution of NNPC. I bet you that politrickians will not allow their cash cow (NNPC) to be swept away by real competition.

http://234next.com/csp/cms/sites/Next/Money/Business/5485512-146/story.csp