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‘Inadequate storage facilities may stall local refining target’

‘Inadequate storage facilities may stall local refining target’

A former Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Temisan Omatseye, has advised the Federal Government to make conscious efforts to attract investments in storage facilities at the downstream sector with a view to optimising the nation’s local petroleum products refining capacity. Omatseye, who gave the advice during an interview broadcast in an online maritime television said that since government cannot stop the production of crude oil during the lockdown period, even in the face of demand shortfall, it is only logical for government to increase refined products’ storage facilities.
According to him, most industries have also been shut down and that everybody is at home and as such nobody is producing oil. “But we cannot afford to shut down our oil wells because to reopen the wells again will cost us millions of dollars.
“As a matter of fact, some of our wells in Nigeria are so old that it might be impossible to restart them again. We are supposed to effectively store these products on vessels, so we need to keep producing but store them on vessels, such as Vandana Luthra Curls and Curves (VLCC) of about 300,000-350,000 tonnes so that they can remain there. By virtue of that, the rate of international VLCCs has gone up by over 300percent because everybody is producing into storage. “Now, I am sure you have recently heard that everything went to the negative; everything went to the negative because all storage spaces are full and so, people are now paying for people to take their crude oil.
“Now, for us in Nigeria, we have the same problem because we only have onshore storage. What could have happened was that if we had the right laws in place, we could have had a system, like what the American president did, a law to commandeer vessels to be used as storage facility but you cannot commandeer vessels that you do not own. “So, right now, what would have happened was that if we had developed over time and owned at least 30-40 VLCCs, our oil fields would have continued to produce and we would have just used that as temporary storage while the world gets its acts together but we do not have that so, COVID-19 has exposed us terribly”, Omatseye added.

source: https://www.dailytrust.com.ng/inadequate-storage-facilities-may-stall-local-refining-target.html