Shell Petroleum Development Company, a major player in Nigeria’s oil sector, has said that it will not invest in refineries in the country but will rather up its investment in gas production.
Shell’s outgoing Executive Director, Upstream International, Mr. Malcolm Brinded, made this disclosure while fielding questions from newsmen after meeting with President Goodluck Jonathan at the State House.
Brinded, who led a delegation, which included Andy Brown, the incoming Executive Director, and the company’s Managing Director, Mr. Mutiu Summonu, insisted that running refineries is no longer viable.
His words: “Shell is divesting refineries all over the world because there is a surplus of refineries.
“We no longer own any refineries even in the United Kingdom.
“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.
“So, it is not essential for every country to have their own refineries to do all the capacity they need.
“Not in today’s world because there is surplus available and therefore it means you can get that capacity and those refined products.
“As long as that trade is well and disciplined and well controlled, there is a surplus of refined products available in the world that can meet the needs of countries.
“I do believe in investment in the downstream sector, especially gas sector in Nigeria, as I touched on is very important issue.
“Nigeria has huge resources of gas that is yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.
“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.
“What I will say is that we continue to invest particularly in developing the gas sector, the power sector.
“I’m very proud we built the Afam Power Station in my time.
“It was a decision I took myself after talking to the then Mr. President and we went ahead and pressed on with the 650mw power station.”
The Minister of Petroleum Resources, Mrs. Dizeani Allison-Madueke, is excited that Shell has agreed to increase gas production in the country, saying it would help the ongoing National Integrated Power Project and increase domestic gas consumption.
Allison-Madueke told newsmen after the Shell management meeting with Jonathan: “Some of our concerns, which we have expressed to them and to Mr. President of course, lie in the area of domestic gas and the integrity of the gas plant.
“That, of course, is a major concern because of the NIPP power plants that we must provide sustainable and adequate volume of gas if we need to move forward in the manner that the government will like to move forward in terms of power supply.
“Shell has assured us in this meeting with Mr. President that they will up the supply and production of gas in the western axis and that they will take very seriously our major concern with the domestic gas supply in the western axis, which is the axis that Shell is predominant here.”