"Refineries have not undergone turn around maintenance for 42 years" - Maikanti Baru

The group managing director of the Nigerian National Petroleum Corporation(NNPC), Maikanti Baru, said that the country’s refineries had not undergone Turn Around Maintenance (TAM) for an aggregate of 42 years.

Baru disclosed this in his New Year message issued by the corporation spokesman, Mr Ndu Ughamadu, in Abuja, on Monday, December 31, 2018

He said that in spite of the challenge, major rehabilitation works were carried out in all the three refineries, The News Agency of Nigeria (NAN) reports.

He noted that the Warri Refinery and Petrochemical Company, WRPC, had its Distribution Control System (DCS) successfully upgraded while the Port Harcourt Refining Company (PHRC) had major interventions in Fluid Catalytic Cracking Unit, (FCCU) and Power Plant Unit (PPU) fixed.

  

He added that Kaduna Refinery and Petrochemical Company (KRPC) was undergoing major repairs of its FCCU, Catalytic Reforming Unit (CRU) and Crude Distillation Unit 2 (CDU2).

According to him, efforts are afoot to get the original builders of the refineries to carry out TAM on them after securing favourable private funding for the exercise.

On the downstream sector, he said that although 2018 was riddled with some supply shortages, he was delighted that the corporation rose to the occasion with the support of President Muhammadu Buhari and the resilience and hard work of NNPC staff members.

“As at today, there is fuel availability in the nooks and crannies of the country,’’ he said.

He further disclosed that the NNPC imported a total of 15.874, million metric tonnes of Premium Motor Spirit (PMS), otherwise called petrol through the DSDP and the NFSF arrangement in 2018.

This, he said represented 62 per cent increase over the 2017 supplies of 9.807 metric tonnes.

“As at today, the NNPC has 2.98 billion litres, equivalent to over 59 days sufficiency at 50 million litres daily evacuation,” he said

He added that the corporation’s depots had been resuscitated and put to use through decanting of over 140 million litres of PMS nationwide, explaining that systems 2B and 2E pipelines supplying petroleum products to South West, South-South and South East Regions had been resuscitated.

On the Industry milestones in the outgone year, Baru disclosed that the Egina project had achieved First Oil at 11.20pm on Dec. 29, 2018 while he noted that the Egina Floating Production Storage and Offloading, FPSO, vessels was currently adding 200,000 barrels of oil per day to the country’s crude oil output.

He further stated that Nigeria’s crude oil daily production recorded an upward swing of about 2.09 million barrels in 2018, translating to a nine per cent increment, compared with the 2017 average daily production of 1.86 million barrels.

Compared against the low-level daily crude oil production in 2016 and what obtains now, Baru, said the nation had maintained a line of consistent year-on-year improvement.

He explained that the average production from NPDC’s operated assets alone grew from an average of 108,000 of oil per day (bod) in 2017 to 165,000bod in 2018.

He described the feat as the strongest production growth within the oil Industry in recent times, even as he added that it was worth being celebrated.

The GMD said NPDC’s equity production share which stands at 172,000bod, representing about eight per cent of national daily production, was no less impressive.

He added that the desired results were the outcomes of initiatives his Management team intended, among which, he noted, were the Asset Management Team (AMT) structure, Strategic Financing, Units Autonomy and security architecture framework.

Baru promised that NNPC would stick to the Repayment Agreement with the JV Partners while transiting to self-funding IJV modes with the corporations’ partners.

“Tiding up the Cash Call issues has led to increased commitment and enthusiasm to invest in Nigerian Oil and Gas Industry even as it has also boosted NNPC’s credit profile internationally,” he added.

Baru highlighted the achievements of NNPC in the Upstream sector by listing other milestones achieved by his team to include: reduction in contracting cycle for Upstream Operations to nine months from an average of 24, even as the corporation targeted a six-month cycle.

Others include lowering of production cost from 27 dollar per barrel to 22 dollars per barrel; and improving on the security situation in the Niger Delta through constructive engagement and dialogue with relevant stakeholders.

Baru revealed that in the frontier basins, NNPC had intensified explorations activities in the Benue Trough, with the expected spudding of Kolmani River Well 2 on Jan. 19, 2019.

He explained that activities would resume in the Chad Basin as soon as there was a green light on the security situation in the enclave.

  

In the Midstream, the NNPC GMD stated that in 2018, Nigeria achieved an average national daily gas production of 7.90bscf, translating to three per cent above the 2017 average daily gas production of 7.67bscf.

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He said out of the 7.90bscf produced in 2018, an average of 3.32bscfd (42%) was supplied to the Export market, 2.5bscfd (32%) for Reinjection/Fuel Gas, 1.3bscfd (16%) was supplied to the domestic market and about 783mmscfd (10%) was flared.

The GMD stated that out of the 1.3bscfd supplied to the domestic market, an average of 71mmscfd went to the Power Sector, while 470mmscfd was supplied to the Industries and the balance of 69mmscf delivered to the West African Market through the West African Gas Pipeline (WAGP).

Baru said NNPC would bridge the medium-term domestic gas supply deficit by 2020 through the corporation’s Seven Critical Gas Development Projects (&CGDPS).

According to him, a reputable Project Management consulting firm is collaborating with an NNPC team to achieve accelerated implementation of the projects.

He assured that full implementation of the project would boost domestic gas supply from about 1.5bscf/d to 5bscf/d by 2020, with a corresponding 500 per cent increase in power generation and stimulation of gas-based industrialization.

Baru said all existing power plants in the country now had a permanent gas supply pipeline infrastructure, even as he stressed that the corporation would continue to expand and integrate its gas pipeline network system to meet increasing domestic gas demands.

Meanwhile, the federal ministry of power works and housing has reportedly proposed a budget of N167.96m in 2019 for the purchase, maintenance and fuelling of generators at its headquarters and various agencies.

Giving a break down on how the sum is to be spent, The Punch, citing analysis of the 2019 budget proposal of the ministry, reports that the headquarters of the power ministry, set aside N26.6m for the maintenance of plants/generators, while plant/generator fuel cost was put at N16.3m.

The ministry also made a budget proposal of N50m for the purchase of generators while its national rural electrification agency proposed to spend N488, 000 on the maintenance of plants and generators, while N1.55m was budgeted as fuel cost for its plants and generators.