*Says Nigeria should regain its top African crude producer status
Ayo Ola
A retired deputy Director of the now-defunct Department of Petroleum Resources, (DPR), Engineer Sunday Adebayo Babalola, has called on the federal government and other stakeholders to encourage more usage of gas by Nigerians.
In an interview with journalists, he said it was sad that gas stations are found in some residential areas and called on regulatory authorities to address the anomaly which has calamitous potential.
He said, ‘To encourage more gas usage, we will have to explore more for gas. It has to be gas-targeted exploration. And you will encocurage gas utilisation. You will encourage proper gas management.
‘It is imperative to ensure safety as there are gas stations near some residential estates and homes. That is the regulator’s problem. We have laws that regulate these things. If regulators are not doing their job well, the government should call them to order. Why are you putting gas stations in residential areas? I see it and I am surprised. You see petrol stations in residential areas. It is absolutely wrong.”
He stated that the reason behind the regular Turn Around Maintenance of the nation’s refineries should be well-reexamined.
Babalola said, “The refineries should have been privatized. But now that the NNPCL is a limited liability company, it will do better. But you have four refineries that are not working at all and you are paying staff salaries; it does not make sense. Only the government can do that. It is not about privatizing refineries and removing the subsidy. The refineries themselves should know that they have to work in order for them to make money.
“The crude oil they would have sent to the refineries, they send the crude abroad. They import white products from that crude oil. We are losing money. You are exporting crude oil and you are importing the white products at exorbitant prices! I do not know what arrangement they reached with all the people who are helping them to do that. Until we study that agreement, we will not be able to say exactly what it should be. You have to remember that people like me sitting outside, it is different from when I was inside. When I was inside, I could go around and get the data but now I am outside, I can not get the data and the facts around those things to be able to give them concrete advice. But I can tell you that it will be difficult for us to make any progress if we were still subsidising white products. You are going to use the money to repair the refineries. Why are you going to get the money, if you even keep borrowing to keep subsiding? They have made Turn Around Maintenance (TAM) many times on the refineries. How do you service a car that has not been working and you keep servicing it, you change parts and it has not been working and you keep spending money on it? And that is what they have been doing. Engaging in TAM on something that has not been working for a long time.”
Babalola, also said it is not a good story that Angola in April 2023 overtook Nigeria in crude oil production.
He said, “It is not good that Angola overtook us in April, The reality is that a country that can produce 3 million barrels of crude per day (mbpd) is producing about 1mbpd, Something is wrong. It is not about comparison with another country. You are making your money and I am making my money. Whether we are producing 4mbpd, the important thing is that we are all making our money. That is the key. What brought our production down is what we should be correcting. Among the thing that brought it down is insecurity, vandalism of pipelines and other things. When you do not solve those problems, your production will continue to be low. It is not about your position. You can be seventh or tenth in the world, if you are producing only 10000bpd, you are still 10th in the world. But that is not good for the country when it can actually produce 3mbpd.
“The fields that have been discovered for 20, or 30 years, which are still dormant, and still remain undeveloped discoveries, the government should find a way to bring those fields to upstream. On the basis of people coming to invest their money, if they want to do it, they better do it through a better process than what they did in 2020. That of 2020 was not good at all. The newspapers all even called them opaque bid rounds. That is what it is.”
The Energy stated that Dangote has been inaugurated, the owner, Aliko Dangote is a businessman who will want to recoup his investments, pay the loans he used in building the refinery and make a profit.
He said, “Dangote Refinery is a good thing. Whether it will be beneficial, we will wait and see because Aliko Dangote is in business, a businessman is always alive to his business. He is always thinking of how he will generate revenue from what he is doing. He is not a charity organisation. We have to bear that in mind. The organisation, Dangote, will start looking at how best to use its resources. It is possible that he will consider giving Nigeria part of it if the conditions are right or he can decide to take his product outside. For it to benefit us in the country, we will wait and see.
“Of course, it is going to benefit Nigeria because he will employ more people and those people he will employ will also socially impact their environment. The organisation, itself will create many direct and indirect businesses around because people are going to be employed. That is going to happen. But for the larger society, the whole of Nigeria, we need to wait and see. Its impact will depend on several factors including the conditions they will give him to supply his product to the country. I am not too sure that they gave agreed on that yet. If they have, beautiful and great.”