By Sunny Chuba Nwachukwu
Oil producing countries in different parts of the globe are known to be better positioned to doing exploits, for the purposes of improving their respective nation’s economy whenever their downstream subsector is extensively deployed and reasonably engaged, with every available opportunity at all stages of a product’s value chain; to recreate, to transform, to improve and add value to the diverse opportunities such stages have provided for productive operations. The oil industry in the fourth industrial revolution has greatly been in the fore, as a prominent arm of any economy that was blessed and endowed with such natural resources, for extraction and production of fossil fuels; in other words, crude oil and natural gas.
This also has been an opportunity for creation of economic windows of comparative advantage, among nations, in energy production and utilization. Citing examples of the nations or some locations within such countries, where relevant activities in petrochemicals operations that are worthy of note and emulation (prominent among those to be mentioned) include Texas in the United States of America; Aberdeen in Scotland; Calgary in Canada; Venezuela, Germany, Malaysia, Singapore, Mexico, Brazil, Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Iran, etcetera. The nation’s downstream subsector desires to attain such levels in international trade. Using a country like Germany for instance, petrochemicals are industrial raw materials that gulp billions of US dollars annually on imports; which reflects on the annual balance sheet huge sums spent in international trade with other nations over such items.
This comes to mind, now that the rehabilitation work on the Port Harcourt Refineries (210,000 barrels per day off take) has kicked off. The glad tidings of the on-going work is that the contractors, Tecnimont S.P.A., fixing the project, hires and engages 3,000 employees, till the due date to deliver an expected 90 per cent functional facility, roughly within two years from now. This employment opportunity attracts some kind of relief on the nation’s unemployment burden the economy within the specified duration of the project. The multiplier effect on the affected homes for those employees, (of course as breadwinners) shall conveniently touch over 10,000 lives, with assured provision of food on the table for their families, secured within the said period.
This long neglected subsector of the economy, that has high capacity for productivity and potential for great positive turnaround, as a solution carrier, shall open up opportunities to further enhance establishments of more complex petrochemicals technology and productions in the economy. Thanks that methanol synthesis shall progressively spring up (apart from the fertilizer plants), as petrochemicals feedstock processed from harvesting natural gas at the various oil wells and fields that are dedicated for local refining operations. These actions shall add to the already simple, long chain hydrocarbon resins (the likes of the Low Density Polyethylene and High Density Polyethylene and its equivalents in Polypropylene, LDPE, HDPE LDPP, and HDPP used by plastic industries), being the familiar polymer products already known, as locally produced.
Such activities, if effectively harnessed shall drastically reduce foreign exchange loads on the very weak local currency, the naira (which signifies a clear advantage of import substitution for the national economy). A very striking and fascinating aspect of it shall be, when the locally processed methanol is subjected along with other locally sourced primary and secondary petrochemical raw materials, for productions of the ‘finished petrochemicals’ (the likes of polystyrenes, polyurethane, industrial solvents, etcetera). These among others, are our real-sector needs for the diverse giant manufacturing operations, in subsectors like automobile industries, pharmaceutical industries, paints industries, textile industries, foam industries, agricultural sector, building construction, chemicals and other industrial subsectors in the economy.
Let no one be deceived because, by the on-going project at the PHRC, those others at Warri, the Warri Refining and Petrochemical Company, and Kaduna, the Kaduna Refining and Petrochemical Company (if finally resuscitated back to life), the giants in the downstream like Dangote and others, shall complement an aggregated stocking of petrochemicals feedstock, primary and secondary intermediate raw materials that should fully position this economy as a self-sufficient and fully sustainable economy for high productivity, with a complete shift from a ‘consumer economy’ to a ‘productive status’ in international trade operations.
This actually is a major reason why the nation should ignore debilitating commentaries against fossil fuels (oil and gas) following the push with innovative technology for alternative, renewable, cleaner energy sources, because there is still much to be savoured within the economy from downstream operations, if actualized through political will. I will urge, therefore, that the federal government should rise to the occasion, and move to attract foreign direct investments into the petrochemicals subsector of the downstream in the nation’s oil and gas industry.
Nwachukwu, a graduate of pure and applied chemistry with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce.
Sunny Chuba Nwachukwu (FICCON, LS)