THE Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Austin Oniwon, said yesterday that unless the petroleum downstream sector is deregulated, the prospect of having private refineries established in Nigeria may not be realisable.Oniwon spoke in Kaduna after delivering the pre-convocation lecture at the Ahmadu Bello University, Zaria.He xplained that no businessman can afford to invest in the nation's downstream at the moment because the prospect of making profit will be zero.While noting that only the government can bear the loss in the industry, Oniwon pointed out that nobody would want to buy crude oil at the international market and earn below the price for the product without profit.He said:'One of the biggest barriers to any private businessman that is doing investment is if he cannot recover his cost and make profit. Business people survive from the profit they make.'A situation whereby you control a price of petroleum products to a point that is below the cost of manufacturing the product, only government can really invest in such sector because it is only government that bear the loss. Anybody you tell to go and pay for crude oil at international price and earn below the international price for the product he is going to bring will not do it.'That is why private refinery licences are stalled. But once we have the courage to deregulate the sector, you will be surprised. The upstream was deregulated. Infact, nobody ever regulated the upstream and you can see how many people are there. The telecom was deregulated; you see how many people are paying there.'A lot of mistake we keep making is that oil is God given. It is true, God give us the oil, but God gave us water, water is all over the place, but once you put an effort to treat water, you have added value, you cannot take it for free any more.'You cannot take it for free any more. If you want to drink that water, you have to pay for it, and if you say you are going to pay below the cost, the water man will not continue to sell water. So it is the same thing with petrol'.Besides, the NNPC boss spoke on the search for oil in the Benue and Chad basins, saying, 'the nation has a lot of structures that indicate tapping of hydrocarbon, so all we are going to do is to explore and see whether it is there or not.'What we did before was to use old technology in exploring for oil in the Chad basin. But today, we are using more modern technology and we are very sure that if oil is there, we can find it with the technology that we are using now.'Currently, we are very busy in the Chad Basin and when we finish with that one, we will take the data back for full interpretation and once we see anywhere where there is prospect for oil, we will send anotherteam there to go and drill.'And once we drill, we are sure we are going to find oil. We found oil on the other side of Chad, and the formation is the same, so I believe that we might be lucky. But it is not only Chad that is the basin in Nigeria. We have seven basins, which include Niger, Adamawa, Gongola basins among others.'It is a continous thing and so, there is no time frame. If I give you a block today, the first oil may not come out until after five years. So you have to persevere and do your studies, and then you have to go and hope that where you drilled is where you find the oil.''It is not all drilling that are successful, but more often, because of modern technology, you are almost sure that when you drill you will find oil. So it is something that will continue. We call it frontier exploration, it is continuous thing until we are able to mark the whole place, divide into blocks and then people will start drilling.'In places that are not as prolific as the Niger Delta, once you have the block, you have to do so many exploration. It is only a chance of 50-50 that you find oil, you may drill and find oil, but not in commercial quantity. So you cap it and look for something else.'So the exercise that is going on in the Benue trough is meeting with limited success, but with more modern technology, you can analyse and see whether the prospect is much higher than what we are doing now'.
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