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NNPC HOLDS PETROLEUM INDUSTRY DOWNSTREAM SECTOR STAKEHOLDERS’ FORUM IN LAGOS

In a landmark event recently, the Nigerian National Petroleum Corporation brought all the captains of the Down Stream Sector of the Petroleum Industry under one roof.

The key objective of the forum was to discuss exhaustively and frankly issues relating to the perennial petroleum products shortage across the country and find lasting solutions. Speaking at the event, the Group Managing Director of the NNPC, Dr. Sanusi Mohammed Barkindo said that it is a critical period in the evolution of NNPC and the Global Petroleum Industry which offers ample opportunities for investors to access the Midstream/Downstream Sectors of the industry.

He further remarked that the Subsector is at a cross road with different challenges and the forum has been convened to take stock of these challenges and chart a way forward. The GMD said that the Corporation cannot afford to maintain the status quo of long queues at the Filling Stations since the availability of products at affordable pump prices are ways of measuring the performance of the NNPC by the public.

This, NNPC has failed to achieve, hence the need to address the factors and challenges responsible for the failure. Dr. Barkindo listed a number of factors hampering the performance of the Corporation. Primarily is the fact that the Corporation has not been functioning as a commercial entity which accounts for the systemic issues like limited accountability and performance management.

Other internal factors include limited revenue source, high losses along value chain, low refinery capacity utilization and disproportionate administrative and corporate headquarters costs. Speaking further, the GMD highlighted some factors that are extraneous to the Corporation as those of delays in customs clearance, high level of volatility in the international crude oil prices – swinging between $70 - $140 within 5 months, security/unrest in the Niger Delta and the vandalism of pipelines. Dr. Barkindo said that the nonperformance of the Refineries has made offshore refining more attractive and if the trend continues NNPC may suffer the fate of NITEL and Nigerian Airways.

On the way forward, Dr. Barkindo said the Corporation will ensure synergy and central optimization amongst Refineries. He also promised to make contacts with the Kogi State Government and Inland Waterways for the utilization of the River Niger after proposed dredging is completed since the Auchi/Enugu line is virtually nonexistent as a result of vandalism. The GMD then enjoined all the speakers at the forum to come up with practical solutions rather than mere theories.

Numerous speakers representing various stakeholders in the Midstream and Downstream presented papers during the two day forum. Speaking on the second day of the Forum, the Honourable Minister for Petroleum, Dr. Rilwanu Lukman expressed his pleasure at the high level of participation from key industry stakeholders, especially with the sincerity that characterized the expressions of views and positions by various speakers regarding the challenges facing the downstream sector of the oil industry.

The Minister said “as I heard speaker after speaker analyzing the immediate and remote causes of the problems we have with the downstream sector of our industry, and proffering solutions to these problems, I could not help but come to the conclusion that a national consensus is fast emerging on the way forward for the Nigerian Petroleum Industry. From refining through distribution to marketing, the impediments to successful operations are very clear, and they have been very well articulated by various speakers”.

The Minister observed that most of the proposed solutions to these problems are already incorporated in the Petroleum Industry Bill that is now before the National Assembly. It is hoped that some features of the Bill when passed into law, will address the problems that have militated against efficient and transparent operations of the downstream sector of the industry.