Marketers of petroleum products in the country have continued to highlight the negative impact of the long delay in passing the Petroleum Industry Bill (PIB) on the downstream sector of the nation’s oil industry.

Precisely, they said the failure to pass the all-important bill into law for decades has resulted in a loss of appetite to invest in the digitalization of their vital downstream assets.

The marketers, who spoke at the just ended virtual Oil Trading & Logistics Conference (OTL) Africa Downstream Week, however, acknowledged the pivotal role technology plays in the future of storage, pipelines, and coastal assets.

Speaking at the conference on the topic: “The Future of Storage and Pipeline Assets”, the Chief Operating Officer of OVH Energy Marketing, Mr. Mumuni Dagazau, said the delayed PIB was responsible for a dearth of investments in downstream infrastructure in Nigeria.

“The PIB has been dangled for quite a while whereas its passage will create a lot of confidence for investment, not only in technology but in the development of physical infrastructure as well.

“Due to a delay in the passage of the PIB, there is a lack of confidence in the downstream sector in terms of investment requirements,” he said.

Dagazau stated that reality has revealed the need for rapid development of technology in the downstream oil and gas sector, not only for the protection of petroleum assets but for efficiency and speed in making decisions for both the private and public sectors in the downstream industry.

Outlining the drivers of technology in the downstream industry, Dagazau noted that with what had been deployed so far, one could easily tell where operators’ concerns lie.

“Technology is deployed for several reasons and one such is to manage storage facilities, coordinate supply planning, promote business efficiency, and optimizing transportation.
“One of the biggest problems we have is that we need to develop manpower as quickly as we develop the technology. These two literally go hand in hand,” he said.

Dagazau also identified the cost implication of adopting technology for downstream operations as another reason technology is not being deployed as quickly as the industry would like to see.

According to him, “Technology is not cheap, but if we are able to, through other means, reduce cost in taxes and support the oil and gas sector, we will witness a quick upscale of technologies in the sector.”

The COO noted that in addition to the disruptions caused by the PIB, the industry also had issues with compatibility between technology and infrastructure.

He explained that this was because technology has to match infrastructure to give the cost-benefit.

Also contributing, the Chairman, Depot and Petroleum Products Marketers Association of Nigeria (DAPMMAN), Mrs. Winifred Akpani, stated that most downstream oil companies had still not deployed technology or digitalized their operations.

She noted that even for some companies where the technology had been acquired, there was still a lot being done manually.

“For something as simple as measuring what you have in your tank, we still do tank dipping in this day and age, which ordinarily shouldn’t be”, she said.

Akpani, who is also the Chief Executive Officer of Northwest Petroleum & Gas Company, confirmed the availability of asset management systems that could be deployed to achieve the efficient management of downstream petroleum assets.

“Supervision and asset monitoring is very important, we also have geographic information systems, and supervisory control. Others include data acquisition and terminal management solutions introduced by Siemens,” the DAPPMA boss said.

While noting that investments in storage capacity for white products had peaked in Nigeria, Akpani encouraged her counterparts to embark on strategic digitalization of their downstream petroleum assets in order to boost profitability and promote asset integrity.

The marketers also at the session, advocated for the decentralization of petroleum depots from Lagos, pointing out that the concentration of facilities in the state had proven counterproductive to the environment.


Culled from Thisday