REPOSITIONING NIGERIA’S

DOWNSTREAM SECTOR

A Presentation by the Director of Petroleum Resources

DEPARTMENT OF PETROLEUM RESOURCES

Global Dynamics

National Aspiration

Industry Best Practices & Operational Excellence

Imperatives for Repositioning the Nigerian

Downstream Sector

Transparency & Efficiency

Stakeholder Value

Energy Sufficiency

Gas Valorization

Regional Competitiveness Petroleum Product Sufficiency

Energy Sufficiency

Market Volatility

Technology

Geo-politics

Sustainable Development

DEPARTMENT OF PETROLEUM RESOURCES

Strength Opportunities

Extensive market opportunities Rapid technology adaptation in Nigeria

Abundant natural resource base Large regional market opportunities

Appreciable base sub-sector infrastructure Government reforms- Downstream liberalization etc

Substantial Indigenous Participation

Weakness Threat

Poor capacity utilization in the downstream sector Vandalism and sabotage of pipeline systems

Investment Capital constraints Increasing global / regional competitiveness

Business models are largely socio-politically oriented Unstable macro-economic environment in Nigeria- Forex

Poor RAM index of critical infrastructure

The Nigerian Downstream Sector Analysis

DEPARTMENT OF PETROLEUM RESOURCES

Grow the downstream sector in Nigeria into reliable growth

enabler for national development

Improve the downstream sectoral capacity to ensure stable

performance

Develop a robust downstream sector promote guarantees

sustainable investment returns

Strategic Issues of the Nigerian Downstream

Sector

DEPARTMENT OF PETROLEUM RESOURCES

Secure energy availability for increasing national development in Nigeria through an active downstream sector

Fully Liberalize the downstream sector for competitive and more efficient business profitability driven model for domestic self sufficiency

Export downstream products / services to neighboring countries and transform to a regional hub for all downstream related activities

Short-Medium Term Strategic Focus For

Repositioning the Downstream Sector

DEPARTMENT OF PETROLEUM RESOURCES

Infrastructural Status of the Nigerian Downstream Industry

PIPELINE NETWORK OF ABOUT

5,120 KILOMETRES

DEPOTS (183)

PETROL STATIONS (27,238)

TERMINALS (26)

REFINERIES (5)

LUBE BLENDING

PLANTS (46)

DEPARTMENT OF PETROLEUM RESOURCES

Depot Owners No of Depot

NNPC/PPMC 22

Independent Marketers 133

Major Marketers 28

Total 183

7

Downstream Depot Disposition - Global Overview

DEPARTMENT OF PETROLEUM RESOURCES

Downstream Infrastructure Depots

SUMMARY OF PETROLEUM PRODUCTS STORAGE IN NIGERIA

PMS AGO HHK

Capacity (M3) No of Tanks Capacity (M3) No of Tanks Capacity (M3) No of Tanks

Independent Marketers 2254489 277 1112512 191 5815016 159

Major Marketers 758062 52 713799 40 25335 9

NNPC/PPMC 1422699 109 755057 65 1240816 70

Total 4,435,250 438 2,581,368 296 7,081,167 238

ATK BITUMEN LPFO

Independent Marketers 172288 62 81397 26 64540 13

Major Marketers 128872 133 21646 8 7711 7

NNPC/PPMC 0 0 0 0 28378.63 6

Total 301,160 195 103,043 34 100,629.63 26

BASE OIL

Independent Marketers 90157 60

Major Marketers 51745 45

NNPC/PPMC 0 0

Total 141,902 105 8

DEPARTMENT OF PETROLEUM RESOURCES

9

Downstream Infrastructure

ROM

Petrol Stations INDUSTRIAL CONSUMERS KEROSENE IN SURFACE TANKS

INDEPENDENT MARKETERS NNPC RETAIL OUTLETS MAJOR MARKETERS

24,773 36* 2,461 1,584 10,034

Total Nos of Licensed Petrol Stations: 27,238

* THIS DOES NOT INCLUDE THE AFFILIATED STATIONS WHICH ARE ADDED IN THE

INDEPENDENT MARKETRS FIGURE

DEPARTMENT OF PETROLEUM RESOURCES

Downstream Infrastructure

Terminals

Western Zone

S/N TERMINAL TERRAIN TYPE PRODUCT CAPACITY (BBLs) OPERATOR

1 UKPOKITI Offshore FPSO Crude Oil 1,970,258 EXPRESS/SHEBA

2 EA (Sea Eagle) Offshore FPSO Crude Oil 1,479,858 SPDC

3 TULJA Offshore FSO Crude Oil 1,762,445 STERLING

4 ESCRAVOS Onshore Land Crude Oil 2,223,754 CHEVRON

5 FORCADOS Onshore Land Crude Oil 6,289,832 SHELL

6 PENINGTON Offshore FPSO Crude Oil 2,224,132 CHEVRON

7 AJAPA Offshore FPSO Crude Oil 80,000 BRITTANIA-U

TOTAL 16,030,279

10

DEPARTMENT OF PETROLEUM RESOURCES

Downstream Infrastructures-

Terminals Cont’d

Lagos Zone

S/N TERMINAL TERRAIN TYPE PRODUCT CAPACITY (BBLS) OPERATOR

1 ERHA Offshore FPSO Crude Oil 2,211,400 ESSO (MOBIL)

2 BONGA Offshore FPSO Crude Oil 1,998,577 SNEPCO

3 OYO Offshore FPSO Crude Oil 1,109,580 ALLIED

4 AGBAMI Offshore FPSO Crude Oil 2,150,000 CHEVRON

5 AKPO Offshore FPSO Crude Oil 1,999,788 TUPNI

6 ABO Offshore FPSO Crude Oil 933,130 NAE

7 USAN Offshore FPSO Crude Oil NA ESSO (MOBIL)

8 AJE Offshore FPSO Crude Oil NA YINKA FOLAWIYO

TOTAL 10,402,475

11

DEPARTMENT OF PETROLEUM RESOURCES

12

Downstream Infrastructure-

Terminals Cont’d

Eastern Zone

S/N TERMINAL TERRAIN TYPE PRODUCT CAPACITY (BBLS) OPERATOR

1 ODUDU/AMENAM Offshore FSO Crude Oil 2,198,000 TEPNG

2 OKWORI Offshore FPSO Crude Oil 1,700,000 ADDAX

3 ANTAN Offshore FPSO Crude Oil 1,036,750 ADDAX

4 OKONO Offshore FPSO Crude Oil 949,000 NPDC

5 OKORO Offshore FPSO Crude Oil 360,000 AMNI

6 IMA Offshore FSO Crude Oil 994,989 AMNI

7 YOHO Offshore FSO Crude Oil 2,192,653 MOBIL

8 EBOK Offshore FSO Crude Oil 1,175,000 ORIENTAL

9 BONNY Onshore Land Crude Oil 5,700,000 SHELL

10 BRASS Onshore Land Crude Oil 3,271,000 AGIP

11 QUA IBOE Onshore Land Crude Oil 8,520,000 MOBIL

TOTAL 28,097,392

DEPARTMENT OF PETROLEUM RESOURCES

Refineries & Refining

Infrastructure –

Few Specific Contributory

Factors:

14

Capacity Utilization in Downstream Sector

DEPARTMENT OF PETROLEUM RESOURCES

Price Fixing / Regulated

Market Model

Costly to Government

Prone to operational

frauds / market abuses

Limits investors confidence

Weak / Inefficient in ensuring stable market conditions

Open Market Model

Promotes investors

confidence

Enhances operational efficiency

Reduces government

interference in the market

Ensures sufficiency in

Product availability

Market Model for Downstream Sector

DEPARTMENT OF PETROLEUM RESOURCES

Promote sustainable availability for funds

Ensure availability of funds that promotes regional

and global competitiveness

Financing Options for Downstream Activities Must

DEPARTMENT OF PETROLEUM RESOURCES

Implementation of robust policies and strategies that :-

– Ensure high technical availability – (reliability, availability & maintainability) index of all

critical infrastructures in the sector

– Promote progressive improvement of the capacity utilization of all infrastructure in the

downstream sector

– Sustain a vibrant market structure for the downstream sector

– Guarantee availability of finance that supports growth in the sector

Repositioning Nigerian’s Downstream Sector Will Require

DEPARTMENT OF PETROLEUM RESOURCES

Thank You