Gov Emmanuel: Developing The Downstream For The Upstream Sector
By Emmanuel Nicholas
The upstream companies identify oil and natural gas deposits and engage in the extraction of these resources from underground. These firms are often called exploration and production companies. Refiners represent the downstream element of the oil and gas supply chain.
Upstream oil and gas operations identify deposits, drill wells and recover raw materials from underground. This sector also includes related services, such as rig operations, feasibility studies, and machinery rental and extraction chemical supply.
Downstream operations include refineries and marketing. These services turn crude oil into usable products such as gasoline, fuel oils and petroleum-based products. Marketing services help move the finished products from energy companies to retailers or end users.
Nigeria is an oil producing country that has only a functional Upstream institution without any functional downstream companies , because of this the country depends on importation of the by-product of crude oil- a raw material the country is the fourth largest producer of in the world .
Because of the epileptic State of its refineries, the masses are buying fuel at exorbitant prices, as the cost of get forex for importation is so high. This high cost of exchange also increases the prices of these products in the domestic market.
Today, Nigeria is the only country that has large deposit of crude oil and the populace are buying the by-product at hiked prices that have increased the suffering of the citizens. The withdrawal of subsidies on all petroleum products by Federal Government, further compounded the high cost of living of the middle class and the downtrodden.
Governor Udom Emmanuel seeing these levels of suffering by the masses is collaborating with the private sector to bring about the desired change in operations of Government. Governor Udom has refused to see paucity of funds as an excuse not to industrialized Akwa Ibom State as he has promised during the political campaigns.
Akwa Ibom State being the largest producer of crude oil in Nigeria needs to develop the downstream vast economic values of the State, (oil and gas sector) to earn high economic gains from the functional upstream sector.
Governor Udom Emmanuel knows that the development of downstream sector will create wealth and jobs for the people of Akwa Ibom State and Nigeria at large and also expand the general GPD of the country ,while alleviating the suffering of the commuters as the adequate supply of the products will bring down the prices .
With reduction of prices of gasoline , the price of transport of humans and good will also slump , and inflation of all prices of commodities will decrease in the country , as several economies depends on the oil and gas sub sector for survival.
It will not only reduce inflation, the local currency will be stronger as it will reduce importation of the products and other related products. There is no economy that can have a strong currency when it depends on importation.
Evaluating the methodologies Governor Udom Emmanuel has devised to ensure it brings about a working downstream sector, reveals the following:
Development of Ibom Deep Sea Port:
Governor Udom Emmanuel is aware that without a working Sea Port the Downstream will not be able to export their product to other countries for higher profits and it will be difficult to transport the product to other States in Nigeria.
The proposed Ibom Deep Sea Port Project is to cost about $1.7 Billion and the burden of funding the project does not rest squarely on the state Government as the project would be funded via a tripartite arrangement.
The Sea Port Is to be funded by the state and federal Governments as well as by a private investor using a 20-20-60 sharing module. The State and Federal Governments would each contribute 20% of the funding while the private investor would bring in about 60% of the funding.
These are key components of the industrial city
• Petrochemical Industries (eg, fertilizer plant)
• Refineries and Tank- farms for downstream
• Five Star Hotels and manufacturing companies
• Dockyard and watercraft Repair Facilities
• Cargo Handling and Associated activities, skyscrapers offices
-Housing Estate and warehouses
The Ibom Deep Sea Port is designed to be one of the components of proposed Ibom Industrial City and at completion can employ 200,000 workers.
To help in the building of Tank farms, The Federal Government has also granted licence to the Akwa Ibom State Government to establish an international jetty at Ikot Abasi local government area of the state to help the downstream sector in haulage and building of Tank farms and floating Station. The Jetty which will sit in 36 acres of land is a free trade Zone with international business district attached, hotels. Already more than three multinational firms have shown interest in the building of the Jetty. It is a free trade zone , that will also have floating stations, Sky scrapers for offices , warehouses , Airstrip and business community ,shopping malls and financial layout for financial institutions.
Among the downstream companies Governor Udom Emmanuel is partnering with Private sector to bring about are
1. Danium Energy Services, at Mbo. The company has completed a 28M litres petroleum products storage tank farm worth 4 Billion with a private jetty.
2. Hi-Rev Petroleum at Iko, Eastern Obolo, Construction of a Refinery at 40% completion, Whose refinery has a capacity when completed to produce 50,000 barrels per day is rearing to take off. Currently negotiating with CBN for favourable forex to import more equipment to progress work due to instability in forex. Also the refinery is sited at the huge Utapate oil and gas field of which they are the present owners
RESOURCE PETROLEUM LIMITED: This is a 100,000 BPD refinery that the Government is also promoting. All the licenses have been obtained. The land, 96 hectares, has been cleared at a location between Eket and Ibeno and construction of the Refinery has commence .
The government wishes to ensure that no resources of Akwa Ibom State are lost in any abandoned investment; the State has an equity share in AMAKPE REFINERY.
And the Government is also working on resuscitating the Amakpe Refinery. A couple of meetings between parties have been carried out. It is meant to be the first privately owned oil refinery in Nigeria. Government has inspected the facilities and is satisfied. The design and engineering metrics have been finalized, at the manufacturing facility in Pasadena Texas.
The PETROCHEMICAL PLANT is another Refinery plant which will place Akwa Ibom State on the threshold of becoming Nigeria’s, nay Africa’s industrial hub going by the aggressive approach adopted by the Governor Udom Emmanuel administration to massively industrialize the state in line with his campaign promises.
Once the gas purchase agreement with Exxon Mobile is finalized, work will commence immediately,” he said. At the ground breaking event, Mr. Ovia who spoke on the effect the plant would have in the state and the nation in general said: “Petrochemicals are vital to our everyday life- the plastic bottles that allow us to drink sanitary water, the clothes that we wear, the fertilizer that are used to grow crops, the tyres on our cars that brought us here today, the shovel that we will use to break the ground today; the pharmaceuticals we take every day to enjoy a healthy life, are all derivatives of the petrochemicals of some form.”
Another downstream company Akwa Ibom State governor is partnering with the private sector to establish is Delmar Petroleum and Jetty located at Itak Idim Ekpe, Ibeno Local Government Area of the State.
The Chairman Delmar Petroleum and Jetty, Dr Austin Odili congratulated Governor Udom Emmanuel for his ability to woo investors and the foresight to plan for the industrialisation of the state saying the investment would yield multiple gains.
He said that the prevailing economic woes experienced in the country would have been averted if the leaders were able to plan ahead of time and assured that the firm, on take off, would produce for both local and International market.
Dr Odilli explained that Delmar Petroleum which is an Oil and Gas trading Company, incorporated in 1993 with specialization in the sales, distribution and storage of Petroleum Products will have access to the deep sea through a conventional Bouy Mooring system for loading and discharging large capacity product tankers from 30kt to 100kt.
Lastly the Governor Udom Emmanuel is poise to ensure Akwa Ibom State is industrialize , which will creates jobs and wealth to both indigenes and residents of the State.