Crude Oil Refiners Owners Association of Nigeria (CORAN) has said that Nigerian crude into should be transformed into Nigerian prosperity.
It stated that such should be done so that future generations wilk say that when the opportunity came to change the nation’s story, Nigerians seized it.
Chairman, CORAN, Mr. Momoh Oyarekhua, spoke yesterday in Lagos during Nigeria Oil Refining Summit.
He said: “every barrel refined in Nigeria means more jobs for our people, more opportunities for our businesses, more value retained in our economy, and greater energy security for our future. Years from now, let it be said that this summit was not merely another industry gathering.
“Let it be remembered as the moment when stakeholders across the value chain chose collaboration over fragmentation, action over hesitation, and national value creation over business as usual.
“If we succeed, Nigeria will not merely be a major producer of crude oil. We will become a leading refining and industrial powerhouse, creating prosperity from our resources and opportunities for generations to come.
“For too long, Nigeria has been known as a nation that exports crude oil and imports value. Yet we stand today at a moment when we can change that narrative. We have the resources.
“We have the market. We have the investors, the regulators, the producers, and the refiners. What we need now is the collective will to connect them all in a way that delivers lasting value for our nation.”
Oyarekhua called for full institutionalisation of Naira-for-Crude, with transparent eligibility and access for qualifying domestic refineries, including modular refineries.
He stated that there should be a domestic crude pricing template recognising crude quality, delivery point, avoided international logistics costs and actual domestic evacuation expenses.
He called for the strengthening of enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act while preserving workable commercial arrangements between producers and refiners.
He advocated crude swaps and proximity-based supply arrangements that allow crude-producing assets located close to domestic refineries to supply those facilities without unnecessary transportation through distant export infrastructure.
He also called for progressive reduction of petroleum-product imports, with imports increasingly restricted to objectively determined domestic supply shortfalls and strategic-stock requirements.
He said there should be creation of a Refinery Development Financing Framework providing long-tenor financing, guarantees and refinancing mechanisms for new refinery construction and capacity expansion.
He said it is necessary to ensure the development of shared petroleum-product infrastructure, particularly pipelines, depots, storage terminals, jetties, rail evacuation and other common-carrier facilities.
He advocated the establishment of strategic petroleum-product reserves capable of cushioning temporary refinery shutdowns, maintenance periods and international supply disruptions.
Oyarekhua called for regulatory and fiscal incentives for refinery expansion, particularly investment in conversion units capable of increasing domestic production of petrol, aviation fuel, LPG and other essential products.
He added that there should be a clear domestic refining roadmap establishing national targets for refining capacity, domestic market share, petroleum-product imports and eventual export capacity.
Oyarekhua said: “Nigeria has already taken the difficult decision to reform the petroleum-products market. The next stage must be equally bold. The country must now; Support the refinery. Support the pipeline. Support the storage terminals.
“Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost.
“Our crude must increasingly power our refineries. Our refineries must increasingly supply our market. And Nigeria must ultimately become a refining hub for Africa. That should be the destination of petroleum-sector reform.
“Achieving these objectives requires partnership among producers, regulators, refiners, marketers, financiers, host communities, and the media. Together, we can build a more competitive and sustainable refining sector that serves Nigeria’s long-term interest.”
Minister of State for Petroleum Resources (Oil) Senator Heineken Lokpobiri, represented by his Technical Advisers on Regulation, Engr Umar Gwandu said the Federal Government had policy approach around three interconnected priorities:
He identified them as securing reliable crude feedstock for domestic refineries; balancing upstream and downstream commercial interests; and de-risking investment through a transparent, predictable and bankable regulatory environment.
He noted that a refinery cannot operate without crude.
He said: “It is therefore impossible to speak credibly about the future of domestic refining without addressing the availability, reliability and commercial viability of crude feedstock.
“The Federal Government’s position is clear: Nigeria’s crude production must increasingly support domestic value addition, while maintaining the commercial sustainability required to attract and retain investment in exploration, development and production.
“The Petroleum Industry Act provides the foundation for this policy direction. Section 109 of the PIA provides for the domestic supply of crude oil and condensates and empowers the Commission to establish mechanisms for the Domestic Crude Supply Obligation.
“The Act also recognises that crude transactions should be commercially negotiated, having regard to prevailing international market prices.”
He added: “The Domestic Crude Supply Obligation, therefore, should not be viewed merely as an administrative allocation mechanism.
“It is an important instrument for advancing national energy security and strengthening the linkage between our upstream and downstream sectors.
“In this regard, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has developed the DCSO framework in consultation with key stakeholders, including NNPC Limited, OPTS, IPPG, CORAN and domestic refining interests.
“Naira-for-Crude: Converting Crude Supply into Domestic Value: The Federal Government’s Naira-for-Crude initiative represents an important component of our strategy to strengthen the linkage between the upstream and downstream petroleum sectors.
“The policy is designed to facilitate the supply of Nigerian crude to domestic refineries in local currency, thereby reducing foreign-exchange pressures associated with crude procurement and creating a more predictable framework for domestic refining.
“The broader objective is straightforward: where Nigeria possesses the crude, the refining capacity and the market, we must increasingly create the conditions for value to be captured within Nigeria.”