Why we can’t build refinery in Nigeria-Shell

Channels Television  
Updated March 2, 2012

The outgoing Executive Director of Shell Petroleum Development Company (SPDC), Malcolm Brinded on Friday said the company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Mr Brinded, who is in-charge of the Upstream International unit of Shell, said this in an interview with the State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell Director, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world.

“With respect to downstream, two comments there. Shell is divesting from 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.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss.

“Which also means one can get refined products back again and pay very little for it to be refined,’’ he said.

Mr Brinded said that building refineries was no longer profitable and that informed the company’s decision to invest in the gas sector.

According to him, Shell would continue to invest in the development of the gas sector.

“I do believe that investment in the downstream sector, especially gas sector in Nigeria, as I touched on, is very important,” he said.
On the concentration on exporting gas rather than supporting domestic supply, particularly government’s drive to develop the power sector, he said, “yes if you look at our reinvestment over recent years, particularly the involvement and the building of Afam power station, the construction of the Baron UBA and it’s supply to local power and now as we look at the next round of projects, we tend to be involved in the development of the local gas sector for use in power, commercial, industry and so forth. If I look back 10 years ago, we might have done more, but today, I completely agree is a very important sector for the country and is important sector for Shell in this country.”

On the issue of oil spillage, he said most of the spills were caused by bunkering.

“I think the first thing is to distinguish between operational spills which shouldn’t happen and the spills that come from bunkering and theft, which of course we will be pleased to see absolutely stopped.

“Our focus is on cleaning up spills whatever the course, but of course we feel we must prevent the spills that come from our own operations. We are looking and addressing how we can we make sure that the way we remediate and clean up spills is done to the highest international standards and especially how can we give confidence to local communities that the attribution of the spills have been correctly done. And we are making moves to bring in more independent observations of that process of how we determine cause of spills.”