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Boost Nigeria’s Economy via Gas Monetization and Oil Refining
Dr. Soni O. OyekanPresidentPrafis Energy Solutions
4th Intl. Petroleum Downstream ConferencePort Harcourt 2015University of Port HarcourtAugust 19/20, 2015
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Address Outline
State of the Economy of Nigeria Sector Strategies PrioritizationProfitable Oil RefiningGas Monetization Summary
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Huge Plusses of Nigerian Economy
• Africa’s largest economy – can rank 9th by 2050 37.3 billion barrels proved oil reserves, 13th
190 Tcf of gas, potential 600 Tcf, 7th
31 billions boe oil sands; 3 billions tons of coal
• 2.4 MMBPD of oil and liquids
• Banking, communications & entertainment growing
• Agric, services, industrial are GDP contributors
• 6th in the world in farm output
• 247 million population by 2030!
3
Major Challenges of the Economy• Weak infrastructure, industrial base, defense
• Oil & foreign revenues
• 22 % drop in foreign reserves
• $64B debt in 2015
• Oil losses of 400 MBPD
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• Endemic corruption & impunity
• Massive environmental pollution
• Investors flight
Major Challenges of the Economy
• Federal character, population are burdens
• National threats, oil piracy
• Huge expensive governance
• PIB, insecurity
• Oil and gas investments
• Ineffective taxation system
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CountryTax Rev(% GDP)
Nigeria 6.1
Tanzania 12.0
France 44.6
UK 39.0
USASweden
27.0 45.6
Thanks Super Eagles
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• Can do attitude
• Significant contributions in Diaspora
• Lagos State & Eko Atlantic City
• National mindset change
Policy Costs Impacts – US Case
• US Private sector
• 17 MMBPD refining capacity
• Nigerian regulations and uncertainties
• Landscape insecurity and losses
• Global investments
• Inaction impacts GDP, jobs, revenues, etc.
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Maintain Effective Defense• Strong deterrent forces - partner with military allies
• Oil piracy and insecurity
• Stable operating environment
• Business friendly policies
• Reduce cost of oil & gas business
• Strong and independent judiciary
• Bolster investors confidence
• Jobs creation & brighter future
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Achieve 100 GW Electricity Power • Vision 2020 40 GW
• 1.3 GW of 5.5 GW in April 2015
• Gas supply, pricing & vandalism
• GenCos and DisCos
• Infrastructure reliability/security
• Solar, hydro, coal, wind, nuclear
• Petroleum, biomass
• Generation and distribution
• Economic development
• Jobs creation & higher standards of living
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Oil Business Sector Strategies• Oil E&P and marketing business
• Oil trading patronage
• Oil blocks patronage
• Review, amend & assess PIB
• Increase transparency
• Oil thefts & vandalism
• Grow oil and gas revenues
• Efficient taxation system
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0
50
100
150
200
250
300
350
Oil Reserves of Selected Countries, Billions Barrels
Ven Saudi Canada Iran Iraq UAE Nigeria USA
Attract Major Joint Partners • Fiscal & security incentives
• Joint partners equity in oil refineries
• Increase production of dry gas
• Associated gas flaring less than 25 Bcf per year
• Polluters clean up and fined per PIB
• Qtrly performance reviews
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0
2
4
6
8
10
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Category 1
Total Petroleum & Liquids, MMBPD
USA SA Rus China
Canada UAE Iraq Nigeria
A Simplified Refinery Flow Diagram
NHTCatalytic Reformer
Gas Recovery
SulfurPlant
FCCU
H/C
CokerUnit
GasolineBlending
DHTDistillate
Fuels
TamUnit
VacUnit
Coke
Asphalt
Diesel Fuels
Gasoline
Sulfur
LPG, C3=Hydrogen
CrudeOil
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Strategies for Refined Products
• 85 to 95% UF global
• No TAR since 1992
• 305 MBPD demand vs 140 MBPD produced
• Toll refining to meet demand
• 500 MBPD Dangote refinery
• Rationalize current refining assets
• Joint venture refineries with oil production partners in Nigeria
Dec 2011 Refinery DataOniwon's Response
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22% UF in 2013
Strategies for Refined Products
• Global refineries are efficient• Higher clean fuels• Asphalt, chemical feeds• Toll manufacturing during refinery outages, TARs, etc
• Global joint venture refining• Refined products export business
• Profitability, revenues• Economic development• Job creation and training
0
20
40
60
80
100
120
Crude PMS DPK AGO
Toll Mfg. Can Yield More Fuel
Nigeria Global
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Block Drawing of a Typical Refinery
Effective Oil Refinery Management
• Multiple crude units
• Good design, construction and start up
• Reliable feedstock, chemicals and services
• Successful routine & TAR maintenances
• Optimal frequency for process units TARs
• Trained staff and excellent refinery monitoring
• Establish safety culture
• Strong central refining engineering support group
• Review key performance and economic indices (KPIs)
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Nigeria 3rd in Gas Flaring
• Gas reserves of 190 Tcf, potential 600 Tcf• Net 5 Bcfg/d, • Nigeria flares ~500 Bcf/yr, 10% of global• Same as Russia and Iran • Saudi Arabia flared 131 Bcf in 2011• Environmental and health hazards• Revenue loss is $3.0 to $5.0B/y.!
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Short Term Gas Strategies
• Gas for 50% power generation • Hydro, solar, coal, methanol, biofuels, nuclear• Export gas for foreign revenues• Grow petrochemical sector• Flare less than 50 Bcf/y.
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Gas is Future Driver• Incentives for major investors
• Optimize gas export and petrochemical gas
• Low Capex for methanol and derivatives
• C2 and C3 feedstock for ethylene and propylene
• Natural gas liquids for PMS
• Plastics, paints, polymers,
• Pharmaceuticals, consumer products
• Economic development
• Jobs creation
• Increase in foreign reserves
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Methanol Production Process• Natural gas, H/Cs, CO2, biomass
• Methane via SMR to syngas and methanol
Feed Pretreatment
Steam Reforming and Heat Recovery
Cooling and Compression
Methanol Distillation
Methanol Synthesis
Methanol Product
Methanol and Biofuels Industries
• High growth demand for methanol
• Methanol in PMS, 3 % in Europe
• Alcohol flex fuels vehicles (AFFVs)
• MTBE, DME, Marine fuels, MTO
• Methanol generators
• Palm and ground nuts as renewable feeds
• Biodiesel for diesel generators
• Biodiesel for diesel cars and trucks
• Expanded industrial base Jobs creation
• Reduce imports and increase foreign reservesv
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GTL for Clean Fuels
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GTL, Fischer Tropsch synthesis 33 MBPD EGTL Diesel, Kerosene, LPG, Naphtha
Qatar 33 MBPD Oryx GTL Plant
Summary• High priority electrical power, strong defense, debt
reduction and revenue growth
• Bolster investor confidence
• Revamp Nigeria’s oil E&P sector and protect the environment
• Meet energy demands and export refined products
• Balance gas export and power generation
• Grow petrochemical business on gas
• Establish energy, chemical and consumer products business sectors on gas
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Acknowledgements
Prof. Godwin Igwe, Chair 4th Conference on Gas Utilization
Prof. Mabolaji E. Aluko, Sunday Musings Notes, June 7, 2015
Dr. Ngozi Okonjo-Iweala, Clarifying Nigeria’s Debt Position
US EIA Reports on Nigeria
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Thank you for your time