As citizens, we are all stakeholders in the fate of Nigeria’s oil and gas industry. For more than four decades, our leaders and their appointees have concentrated on the upstream sector (i.e. crude oil extraction and marketing), hence neglecting the downstream sector (refined products and petrochemicals). This is a huge leadership gap.
Although Nigeria is a major oil producer and exporter, the economic benefits of these natural resources have not been shared with most of its large indigenous populations. And, for the past 40 years, oil and gas exploration, drilling and pipelines have caused a series of environmental and health problems.
Crude oil has little or limited use until processed into refined or petrochemical products. Petroleum refining is the process of separating the many compounds present in crude oil by boiling the crude at different temperatures and using advanced methods to further process the crude into products such as gasoline, diesel fuel, and heating oil. The chemistry of hydrocarbons is the principle used in this process: the longer the carbon chain, the higher the temperature at which the compounds will boil.
Generally, crude petroleum is heated and changed into a gas. The hot gases are passed into the bottom of a distillation column and become cooler as they move up the height of the column. As the gases cool below their boiling point, they condense into a liquid. The liquids are then drawn off the distilling column at specific heights, ranging from heavy residuals at the bottom, raw diesel fuels in the mid-sections, and raw gasoline at the top. These raw fractions are then processed further to make several different finished products.
This proposal will show that we could do better if the global expertise of our chemical engineers and scientists are fully exploited. I will demonstrate this statement with the following simple example.
If I offered you a barrel of crude oil, what do you think you could do with it? Nothing practical. (One barrel of crude petroleum contains only 30-40% gasoline). Transportation demands require that over 50% of the crude oil (in U.S) be “converted” into gasoline. To meet this demand some petroleum fractions must be converted to gasoline. This may be done by cracking – breaking down large molecules of heavy heating oil and residuals; reforming – changing molecular structures of low quality gasoline molecules; and isomerization – rearranging the atoms in a molecule so that the product has the same chemical formula but has a different structure, such as converting normal butane to isobutene.
Generally, the simplest refineries consist of crude, vacuum, reforming, and some hydrotreating capacity. The next level of complexity adds cat cracking and some additional hydrotreating. The most complex refineries add coking, more hydrotreating and hydrocracking.
Refining separates crude oil into components used for a variety of purposes, from high-performance fuels to plastics.
Now, if I offered you a toothbrush, a plastic bucket, a coffee cup, you will have immediate use for them. These are products from refined oil and petrochemicals. Now imagine if each of the 36 states of Nigeria has a small/medium scale industry making, producing, manufacturing, these products as listed below. There will be both explosion of employment for the teeming young Nigerians as well as wealth creation for the country.
Petrochemicals
Nigeria’s petrochemicals can be a goldmine whose potentials can be exploited by providing a champion and gatekeeper, e.g., CPRP (Center for Petroleum Refining and Petrochemicals).
The petrochemical industry was to a large extent “made in America”, because it was in the United States that an unusual combination of circumstances existed at a certain point in time: an abundance of inexpensive gaseous and liquid petroleum feedstocks, suitable technology, a large market, and an incentive for rapid development, occasioned by military needs in World War II. This was followed by a consumer-oriented boom that developed when the war was over. Much of the technology, of course, came from Europe and particularly from Germany, which had built-up a formidable chemical industry over a 100-year period. But the German chemical industry was based on coal.
Note that in the late 1930s, most oil companies were still primarily interested in pumping oil out of the ground and trying to improve the profits of their refining and marketing operations. It was also a period when the large international chemical companies had perfected a system of international chemical cartels, patent cross-licensing agreements that made the chemical industry a very restricted club that was very successful in keeping out potential new competitors. The governments supported certain cartels then because many chemical products were of strategic nationalimportance, for example, nitric acid for fertilizers and explosives, caustic soda for refineries, soda ash for glass manufacture.
Whereas the United States could use as raw materials an almost unlimited
supply of Gulf Coast petroleum and natural gas (largely containing methane:
ammonia is the most important methane-based chemical), the German tanks ran on synthetic gasoline made by German chemical factories from coal, and on tires also produced from coal in synthetic rubber plants built a number of years before the United States entered the war. Germany’s chemical capacity was controlled by a cartel that produced calcium carbide, x-ray film, pharmaceuticals, insecticides, fungicides, synthetic resins, chlorine, high octane gasoline, compressed gases, sulphuric acid, synthetic gasoline, spun rayon, total gasoline, aluminum, synthetic rubber, methanol, serums, lubricating oil, poison gases, nickel, plasticizers, organic intermediates, plastics, magnesium, explosives, nitrogen, solvents, gunpowder, ammonia, fertilizer, soda ash. Germany’s production capacity made it one of the strongest fighting machines in military history, because technical decision-making affairs were dominated by scientifically trained managers (the technocrats) who made decisions in terms of research management and even process selection.