The way forward for Nigeria: Step one

[The progress of Nigeria] is obviously a several step process, but this is an excellent start:

"... a lasting solution to this incessant increases (in fuel price) was to have a situation where our refineries work.

"Our major problem as organized labour is government fixation with the belief that Nigerians are so unpatriotic or incapable of running our four refineries. There must be something wrong with this kind of fixation. We contend that other countries have public refinery that work. Why not Nigeria?.

"Take Singapore, which does not have crude oil, but a third (1/3rd) of the world’s refined fuel is done in Singapore. Take other examples like Indonesia or Venezuela that has 18 refineries, or Norway. All these are public, government owned refineries, so why should Nigeria be different.

"So we still make the point that we can’t say that Nigerians are so bad! Nigerians are so unpatriotic that we are not able to have the wherewithal to keep our refineries going.

"What has happened over the last 10, 15, 20 years is that because some syndicates, some cartel find it convenient to import fuel because of the mega dollar profit they make out of this, they now hold the entire country to ransom by ensuring that the refineries don’t work, either by physical criminal sabotage or by ensuring that the turnaround maintenance are not carried out."

"The construction of refineries is where Nigeria needs to start for the Nigerian people to really reap the benefits of oil. Manufacturing of other goods must also take place within the country, however, first we must maximize the benefits of our natural resources while we can, then diversify further."

The entire article[i](an Interview)[/i] is very informative and may be seen here: www.nlcng.org/january2005/gsinterview.htm

What do you think?

In the above excerpt from an Interview titled "Nigeria has been hijacked" from January 2005, John Odah, the NLC General Secretary, argues that there is no reason why Nigeria should not be able to run its own Government-owned refineries.

Well I don't know about that, but I think it's clear that we [I]should[/I] be running our own refiniries in Nigeria, whether publicly or privately owned. Isn't the idea that [I]you[/I] could run your own petroleum refinery kind of cute?

Related topics:
[list][li]"Private Refineries in Nigeria? Almost a Reality!"[/li]
[li]"Crude Oil: A Blessing or a Curse?"[/li][/list]

Nigeria's refineries do not work because they are deliberately sabotaged so govt can award oil block & oil lifting licences.

someone told me that petroleum can be exploited nearly from every state in Nigeria because the layer of oil runs criss/ cross the country of nigeria in lines running from east to mid west. There are some other minerals that are present wherever there is Oil. Is this true.

Can someone tell me whether the quota of OPEC includes oil derivatives like plastic and other polimers? Because if it does not cover other matters except for crude oil then we are missing out if we do not exploit the oil derivatives further before export.

I know several foreign companies who want to come and build refineries in nigeria for the past 5 years but they have not been given the licence to build. A year ago,(during the petrol riots) there was a refinery at the sea port just awaiting for the licence but it was not issued by the Nigerian government. These people told me that the Government asked them to bid for the right to contruct these refineries and the cost of every bid runs into several million dollars and it does not come with a guarantee that they will get the licence. They obviously refused to place any bid.

the masses or ordinary people of nigeria can form a public company and bring in the refineries (fully owned by the people for the people) if every working nigerian invested N1000.00 each into this company. It is an investment that guarantees a return for as long as there is oil. Why is no one seeing this as a solution? I wish to be enlightened.

Have we considered other means of earning that Nigeria has been ignoring for centuries now? Agriculture!! Our lands are fertile, lets make use of them. What is it with Nigerians and the petrol craze??

i agree with you we should consider other sources of revenue but we should not waste the oil resources .

Construction of rifineries may not necessarily be the final solution. the US does not have much refineries still they have regualr supply.

if we can make our petrol to be like cocoa (we export 90% of it outside) and we still get to buy it's bye-products. what govt must do is that they must make judicious use of the accruiing benefit from out crude oil export.

the future really look bleak since nigeria largely depend on oil for her revenue. in 20-30 years solar power will displace fossil fuel, i wonder were we will run to then.

The refinery problem boils down to the fact that Naija businessmen are not interested in long term investments, instead we prefer to invest billions in "quickies " like real estate. Tell me, which oyinbo man will invest in this refinery business when our own people are shying away? ...well maybe the chinese, but do we want our country run by china men? they are generally quite a crooked bunch and are not terribly fastidious about worker welfare, taxes or corporate social responsibility and are given to capital flight.

Government has granted at least 15 licenses to indigenous companies what has been done with them? instead they are busy looking for who will buy the licenses off them.

Another factor is the hydra headed monster called "vested interest" as generator importers have done to nepa, so are the fuel importers doing to the petroleum sector. It has simply become too profitable to allow the refineries to function. Look at oando for instance they just spent $100m as signature bonus for an oil block (they will probably spend another hundred to get first oil) yet everyday the marketers cry that the business is not profitable who is fooling who!

Baba as well why has he refused to include petroleum importation contracts under the due process office as all other procurement contracts have been? why is he sitting on the petroleum ministry and what has been the benefit to us as a nation for this? i think if he had been an appointee he would have been sacked a long time ago for gross incompetence.

I agree with joftech we need to make judicious use of our natural resources it is criminal that we are "washing our hands with spittle at the riverside"

I support Avocat's suggestion. As simple and idealistic as it may seem, if 120 million Nigerians contribute N1,000 each, we will have 120 billion and that, i tell you, will be more than enough to build 120 refineries.
The proposed strike of the labour is not the solution, the civil rights activists are not the solution. government has proven over and over that it cannot solve this problem. We have to solve the problem in the oil sector before every other sector can thrive.
We, each and every nigerian, are the solution to this problem. We have to take up the fight against this corrupt government officials and entrenched business interests
We are all Nigerians on this forum and we can start something right from here.

N1000 per everyone on this forum. 1000 naira per every Nigerian to build refineries. Start sending it to the email box of all your friends. Start sending text messages to the GS< of all your friends and relatives. 1000 Naira per every Nigerian to float a company that will build refineries all over Nigeria in which we will all be shareholders.

LET'S TAKE THE FIGHT BEYOND ALL THESE CORRUPT INDIVIDUALS. WE ARE ALL NIGERIANS. LET'S START SOMETHING HERE.
I'M GOING TO START SENDING THIS MESSAGE TO EVERYBODY I KNOW NOW. START SENDING IT TOO

SEUN, I'LL APPRECIATE IF YOU CAN PUT THIS ON THE HOMEPAGE. SIT DOWN LOOK TIME DON END. LET'S START SOMETHING HERE FOR GOD'S SAKE.

Editor: please correct this use of all caps

The most important thing Nigerians need to talk about is regular electricity supply. If there can be a company that can raise capital from Nigerians and buy part of NEPA/PHCN when it's finally offer for sale.

That will go a long way is giving the masses regular and cheap power supply.

Omo Alhaja i hate to say this but your ireality is far removed from this country. How many people in Naija do u think can afford this N1k that you are asking us to donate? Abi u dont understand the level of poverty here? This is a country where in Lagos (the commercial capital) you see workers trekking home from the island just because they cannot afford the fare.

Assuming all of us on the forum buy into this idea; have you thought of the logistics? for instance who would keep the money, who will negotiate with the technical people abi make we build am ourselves? wat will be the size of the refinery, how we go recoup our investments etc....fight go kill all of us! Bros please avoid making simplistic suggestions, thats wat put us in this problem as a country.

It has been said that if u want to hide anything from a blackman, keep it in a book. So i belive that as a first step we need to imbibe a reading culture and revive our learning institutions. This will help us understudy other success stories elsewhere whether at individual, community, corporate and national levels.

Please let us not seek to re-invent the wheel with these harebrained schemes that are simply trial and error initiatives at best at this stage of our national development. There are simply too many success stories to borrow from we just need to know where to look. People, a fool at forty....

Also brothers and sisters in diaspora please come home and contribute their quota to our development, you guys see have seen how things can be done properly so come and share.

Nobody is going to help os we must do it for us.

Joftech please go and read animal farm and see what happens when the "masses are in power"

Joftech please go and read animal farm and see what happens when the "masses are in power"

LOL, LOL,LOL.

Am talking about organized company this time around. Nigerians will buy shares in these companies, it's done around the world.

It is silly for us to be waiting for some foreign investors to buy NEPA and then Siphon all the gain to their country does not really make sense.

I think the FG need to put something of this nature in place. They can use the money for that "Privatization scheme" for it.

Who says if Nigerians buy nepa we will not run it into the ground as well? lets forget all this ideas and get down to the real issues, and like i said before the legal, commercial and political logistics are just too daunting, besides the government has never cared for the people before, why should this situation be any different? Forget this government should do this government should do that mentality. Let our new mantra be self actualisation and self development. When the people are organised it will definitely reflect in good governance.

joftech, i'll try not to join issues with u here. But the fact remains that oil will continue to remain nigeria's main export for some time to come no matter how fast we can develop other sectors. The irony of the situation is that this very oil that we have in abundance is what is impoverishing millions of Nigerians today.

If your own attitude to the whole thing is to `siddon look', fine by me. But what will not be fair is for you to start shooting down ideas from people
that are saying `let's do something about the situation '.
The strike being called by NLC will be a failure like all others before it. Maybe we'll get a decrease of like 3-5 naira, but i can assure you that government has already learnt to outscheme labour by figuring in NLC protests when increasing. So, the price govt. may actually be aiming at should be between 60-62 naira.

Its time labour too changed tactics. Who says labour can't start building refineries all around with the backing of the people. Don't you know about the power of ideas. Go back into history joftech. Revolutions were started by common people. Most never knew where the revolution was going to lead to. But they had the will, at least, to stand up against and try to change a system that oppressed them.

That will is something theat seem to be lacking in us nigerians. We expect labour and civil right groups to do everything when in fact we are the ones that should be doing the most. Who says that Nigerians can't afford to put N1,000 naira down. I just finished speaking with a very good lady who said that if we can push this idea, she knows ten Nigerians that would be willing to put N10,000 EACH DOWN. Even on this forum, there are many that can put more than N1,000 down. And you'll be suprised at the millions of Nigerians outside this forum who can do even more than that.

Why don't we all gather our strengths behind this idea on this forum and sell it to NLC. Let's do something about this situation for God's sake.
ideas alone was what started the french revolution and the russian revolution, yet the masses, coming together were able to defeat entrenched interests

Let nobody tell me it can't work in Nigeria because it can! Our society is even ripe for it now. Let's start sending the message to everybody we know: 1,000 naira per person for NLC to build refineries all over Nigeria. Send it through SMS, send it by e-mail, send it to your relatives, to your friends, even to your enemies. I've sent like 30 SMS in the last 2 hours and even I am surprised at the response. Just give it a try; send it and see what happens!

@Omo-alahaja, if you can endeavor to go through all my posting here on Nairaland you will come across where I have made the same type of suggestion of yours (which you think is a new goldmine).

How about if you open a shop/office and start “The Masses Refinery Movement”, I will be too glad to help in designing a website for your new movement too, I will send you a quote though.

And instead of saying that Labour should be building refinery, how about telling them to become a political party. And why do you think Labour is the messiah of the masses, if you know what is going on between Labour and the FG you will know that all these call for strikes are just a sheer façade.

omo alhaja,

seems like you have missed my point. What i was simply asking you in essence is if this your idea has been researched thoroughly? has it been implemented successfully elsewhere?, do you understand the logistics involved? Ideas always sound good but implementation may be a mother... What is your plan for following through on this idea? This is not about you its aimed at spurring you to think critically of how you can help the country.

Secondly, refinery capital is not a N1k contribution matter, these things often go for about $300m you must have some alternative source of financing dont u think? cos if you do ur math you'll discover that just getting capital may prove to be a loooong winded venture.

Do you really believe that labour can run a refinery, have they come out to say so? or do you think that oshiomole will not line his pockets if given the chance? the guys drives around in the very latest state of the art jeeps, the guy know good thing abeg!

So i admonish you once more please read and research ( not internet alone) you'll will surely discover practical ways of helping the country.

Joftech, you have made me very sad. Know why? Because the same problem with the Nigerian populace is what is rearing its ugly head in this discussion. For just daring to suggest that we all contribute only N1000, Joftech is insinuating that Omo Alhaja is looking for a new gold mine and has the audacity to suggest that we pay him to build the website. Joftech, you are a very selfish Nigerian! In fact, its your type that is exactly the problem with Nigeria, because its your type that will get into government position and begin to `chop'. Once again Joftech, I repeat, you are a very selfish Nigerian.

Klex, I like your own submission. Unlike Joftech, whose brain seem to be a made up of components from a money counting machine, your submission was much more objective. Believe you me, I don't know anything about the logistics. But I know we can start by selling this idea to NLC. Their strikes are no longer working. A change in tactics is of paramount importance. NUPENG, PENGASSAN and the rest are affiliates of the NLC. They are the ones that should work out the logistics

And to the second point you raised. Conservative estimate puts the population of Nigeria at 120m. That figure multiplied by N1000 gives you 120 billion. Half that amount will comfortably build two to three refineries.

Klex, why don't we for once jettison the problems associated with a project like this and look at the possibilities. Ideas are what moves the world. This is an idea. Let's move with it and see how far we can go.

It will only cost us N1000 and it just might be the solution to all our fuel problems

kay:

Joftech, you have made me very sad. Know why? Because the same problem with the Nigerian populace is what is rearing its ugly head in this discussion. For just daring to suggest that we all contribute only N1000, Joftech is insinuating that Omo Alhaja is looking for a new gold mine and has the audacity to suggest that we pay him to build the website. Joftech, you are a very selfish Nigerian! In fact, its your type that is exactly the problem with Nigeria, because its your type that will get into government position and begin to `chop'. Once again Joftech, I repeat, you are a very selfish Nigerian.

Klex, I like your own submission. Unlike Joftech, whose brain seem to be a made up of components from a money counting machine, your submission was much more objective. Believe you me, I don't know anything about the logistics. But I know we can start by selling this idea to NLC. Their strikes are no longer working. A change in tactics is of paramount importance. NUPENG, PENGASSAN and the rest are affiliates of the NLC. They are the ones that should work out the logistics

And to the second point you raised. Conservative estimate puts the population of Nigeria at 120m. That figure multiplied by N1000 gives you 120 billion. Half that amount will comfortably build two to three refineries.

Klex, why don't we for once jettison the problems associated with a project like this and look at the possibilities. Ideas are what moves the world. This is an idea. Let's move with it and see how far we can go.

It will only cost us N1000 and it just might be the solution to all our fuel problems

kay,
What i am asking is what evidence do we have that the NLC can run a refinery? have they provided documentary evidence, is it their word of mouth or are we simply foisting upon them a responsibility they cannot possibly discharge? forget about them please.

They do not have a solution to the incessant price hikes. This particular increase was so ominous given the rise in the cost of crude oil in the last few months everybody knew it was coming what did NLC do? furthermore, i am not convinced of the good intentions of the leadership of the NLC. Why must there be a fuel increase before they engage government constructively? It seems that the NLC is only interested in grandstanding and fighting price hike even with the glaring evidence that the strike option is played out. Is that all we are about? what of those silent labour injustices whats going on there? rampant casualisation, abuse of expatriate quotas, have they even pushed for a review of the workmens compensation act which is the only legislation that deals withe workers health, what of the Labour Act? There is so much for them to do!

Regarding capital do you sincerely believe that you will call upon Nigerians and everybody will contribute just like that? if you are asked will you not think it is 419? You know that we have a unity issue. I am simply saying do your research and come up with a business model, work out the logistics of commencing operations, then come and sell me the idea, thats all i want to see. It is very unrealistic to expect the people of this country to fund such a venture based on what an idea? Even so, we have so many people who have never in their life amassed as much as N1k at a time. If we are serious, lets look to venture capitalist organisations and foreign financial institutions and to do that you must have carried out a feasibility study and have a business plan to be even get your foot in the door.

Very nice discussion here.

Klex, you seem to be missing the point of what Kay is saying. This should be a collective thing to be done by all of us, not something you'll say that Kay alone should go and start doing the research or feasibility studies on. After all, we are all in the situation together.

Why I may not agree with the modus operandi he opined, I still want to believe in the idea in its most simple and basic form ie. building refineries it gives us the chance to grab control of local oil prices out government hands.

Klex, if you don't believe that the ideas being championed by Omo Alhaja and Kay will work, why don't you come up with your own ideas and try and sell it to us on this forum. Ideas, like kay opined, move the world. The idea you submit on this forum might just be what may help us solve this fuel imbroglio.

Don't sit back and just pick holes in the argument of others. Come up with your own solutions too.

Obuks,
Believe it or not the solution to price hikes and guaranteeing supply is a properly implemented deregulation exercise. The process is on course the only snag funding as the license owners have refused to provide counterpart funding and for a foreign investor the local party must carry some of the risk its simple business sense.

If you have looked at the my posts you would have seen that i not only criticised but also made some suggestions.

If the intention is to set up the refineries ourselves? Let me give you an overview of the logistics involved (note this is neither exhaustive nor arranged in order of precedence)

1. feasibility study
2. business plan
3. promoters of the company come together and provide funds for initial expenses such as legal fees, consultancy fees, incorporation fees, site acquisition etc
4. incorporate a company
5. procure the guidelines for registering a refinery and commence the process
6. register the refinery
7. procure funds for the take-off and operation of the refinery
8. procure the equipment for the refinery
9. enter into EPC and technology contracts for the construction, installation and operation of the refinery
10. enter into crude oil sales agreements to ensure steady supply of crude to the refinery
11. enter into take or pay contracts with marketing companies to ensure a minimum level of income for the refinery
12. enter into employment contracts with staff
13. procure equipment suxh as computers, vehicles etc.

Let me stop here lest i give away trade secrets.

A refinery is not childs play so my suggestion is that you understand what it is about before you decide to set up one.

dear members of nairaland,
i have a few practical ideas that can bring the oil refinery to life from the few members of the nairaland users. To finance and bring a refinery to nigeria it's very easily done. These are the steps we must take, asssuming the refinery cost $300million. Please do not be afraid of the sum of money in question because the oil refinery can earn more than $20million per day. work out the mathematics. it will not take long to repay any financing in question. These are the steps:


1. decide what you what to use the refinery to do. Let us assume that it will crack(produce) just petrol, deisel oil and kerosene alone. This is the fuel that flies aeroplanes and run motor cars.
2. create a limited liability company that will buy the refinery with just the members of nairaland (we will then float this company on the stock market and the initial members of the limited liability company can sell their shares and make huge money without refining one drop of oil)
3. create a website to publise the company and invite peopel to subscribe to shares
3. Locate where a refinery is located and make a proposal to puchase - i have these contacts
4. Approach financiers around the world to finance the deal (we may need to raise- such as half a million dollars an amount to show our sincerety and secure the leverage ) - (from my experience - they will be all too happy to do so)
5. Obtain licence to run the refinery in nigeria - (this is the hard part - if any nairaland member has influnence or contact to secure the refinery licence then we are home and dry. you have to grease palms of officials as you know)
6. All we are doing is refining oil and no more
7. We need agreement of the nigerian government and oil companies to refine its oil with us

As a matter of fact. I am aware of a oil refinery that i and my friends wanted to bring to nigeria a few years ago. the attempt did not succeed. we were unable to secure the licence.

To avoid anyone being scammed or cheated. No subscriber or member of nairaland will collect any money from anyone. Once the nigeria company has been formed An escrow account is opened with a reputable bank in nigeria with eg five hundred naira. the members who wish to invest in the private company, will deposit money into this account and they will receive receipt from the bank. The percentage of their contribution will determine their shares and level of voting rights. No one can touch this money until all the agreements and licences have been achieved. Once all agreements and licences are reached. The bank will issue share certificate to the depositors. The bank will undertake to return all deposits to all depositors if nigerian government refuse to grant a refinery licence or if we are unable to secure agreements from oil companies to refine their crude oil within a reasonable time such as six months from the date of the licence. Once the company goes public you can decide to sell your shares and reap a good return on your investment.

to raise half a million dollars, all it takes is 6000 people investing N10,000 or more. This project is not something one person can do alone. We have to first appoint promoters from among us and directors who have relevant experience and contacts in the oil industry. (lets me not talk(write) to much.)

The simple alternative is to pool money to buy shares in the already licensed private refineries.

i hope those so called private refineries will see the light of day. The conspiracy against our economic progress as a nation by the western world projected by a few persons is strong.

There is no conspiracy against us; we are our own worst enemies. Many Asian countries have been able to develop their economies very well despite the so-called western conspiracies, so why can't we move forward?

I am tired of all this talk of ever increasing subsidy which is payment to a selected few people, to bring in a product at a guaranteed profit. The worst form of political patronage possible and an insult to our collective intelligence (hang on, maybe we are too dumb anyway).

I say, sell all the refineries for a token sum (say one naira each plus liabilities), make fuel imports a common business (just have the relevant agencies check vessels, storage facilities and quality), no need for this license nonsense when you want to build a refinery, a refinery is just a glorified factory so apply regular procedures to its approval. Within a short time, local fuel price will be controlled by local market forces and we'll all the best for it.

Of course it wont happen in a corrupt, incompetent setup with no clearly enforced laws and with people that believe in whatever they hear!

But, wont it be nice?

I agree with your private sector driven economy, though people tend to forget it depends on a well functioning public sector. We can't ignore the government

Oh, and I don't think everything should be run by the private sector. Healthcare? that would be a disaster. Electricity, water and the essentials should always have a heavy dose of government because the goal isnt profit, but to make sure everyone gets these esentials.

hi everyone, i was away on business for some weeks. i was wondering, the oil refineries seem to be in the hands of the heavy weights, we are focusing too much on the refineries and becoming blind to the solutions of other problems. what if we installed about 100,000 or more solar panels in the northern part of nigeria and then sell the electricity produced to NEPA and neighbouring countries around nigeria. the idea is that NEPA will not have any more excuse because when the nepa grids are overloaded, the demand can be met by the solar panels reserve (night and day). It is far cheaper to set up these solar panels than to produce and refine oil. Solving the electricity problem will automatically solve the water pump problem (shortage). If this project is successful, it would mean that big companies and businesses will spend less on diesel for their generators and therefore no need to pass on, to the consumers, the additional cost of generating electricty power privately. this will create jobs and boost the economy.

if there are technical guys in the house, please make your criticisms and suggestion known.

Good idea (re Solar Panels et al).
The office I work in PH and Warri runs off solar power with public utility as backup!

The house I stay in runs the same system wth key essentials hooked up to a solar powered system.

Just curious, does solar panels come cheap? What is the cost implication in respect to alternatives like bio-generation plants that come very cheap.

the cost of solar panels are quite expensive initialy
but after runnning it for some years, it becomes cheaper on the long run

If only we could fabricate our own efficient solar panels. Anyway, we are oil rich, so refineries are more important!