PETROLEUM OR CRUDE OIL IN NIGEIA (PROBLEMS AND PROSPECT)

PETROLEUM OR CRUDE OIL IN NIGEIA (PROBLEMS AND PROSPECT)
BY
NJOKU CHIJIOKE


CHAPTER ONE
1.1 INTRODUTION
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights, and other organic compounds, that is found in geologic formations beneath the earth's surface.
Fuel is any material that is burned or altered to obtain energy and to heat or to move objects.[1] Fuel releases its energy either through a chemical reaction means, such as combustion, or nuclear means, such as nuclear fission or nuclear fusion. An important property of a useful fuel is that its energy can be stored to be released only when needed, and that the release is controlled in such a way that the energy can be harnessed to produce work. Examples: Methane, Petrol and Oil.
All carbon-based life forms—from microorganisms to animals and humans—depend on and use fuels as their source of energy. Their cells engage in an enzyme-mediated chemical process called metabolism that converts energy from food or light into a form that can be used to sustain life. [2] Additionally, humans employ a variety of techniques to convert one form of energy into another, producing usable energy for purposes that go far beyond the energy needs of a human body. The application of energy released from fuels ranges from heat to cooking and from powering weapons to combustion and generation of electricity.

1.2 ORIGIN OF FUEL
Petroleum, in one form or another, has been used since ancient times, and is now important across society, including in economy, politics and technology. The rise in importance was mostly due to the invention of the internal combustion engine and the rise in commercial aviation
More than 4000 years ago, according to Herodotus and Diodorus Siculus, asphalt was used in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus. Great quantities of it were found on the banks of the river Issus, one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society.
The term "petroleum" was first used in the treatise De Natura Fossilium, published in 1546 by the German mineralogist Georg Bauer, also known as Georgius Agricola. Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world's most important commodities.
The top three oil producing countries are Saudi Arabia, Russia, and the United States. About 80% of the world's readily accessible reserves are located in the Middle East, with 62.5% coming from the Arab 5: Saudi Arabia, UAE, Iraq, Qatar and Kuwait. A large portion of the world's total oil exists as unconventional sources, such as bitumen in Canada and Venezuela and oil shale. While significant volumes of oil are extracted from oil sands, particularly in Canada, logistical and technical hurdles remain, and Canada's oil sands are not expected to provide more than a few million barrels per day in the foreseeable future.

CHAPTER TWO
2.1 FUEL PRODUCTION
The production of fuel by the partial oxidation of hydrocarbon liquids. In one of its more specific aspects it is concerned with the production of a fuel , for use in turbines, using air as the oxidizing agent for the partial combustion.
It is known to produce fuels by the partial oxidation of hydrocarbon liquids. The prior art suggests air, oxygen-enriched air or relatively pure oxygen as the oxidizing agent. However, so far as is known, only processes in which oxygen-enriched air or relatively pure oxygen is used as the oxidizing agent have attained any commercial significance. It is possible, as the art suggests, to carry out a partial oxidation process using air as the oxidizing agent but unfortunately such processes have not been satisfactory for the production of fuel because, due to the high nitrogen content of the air, the product fuel has an undesirably high content of inert material and a correspondingly low BTU (British Thermal Unit) value. Accordingly, to produce a fuel of low nitrogen content and high BTU (British Thermal Unit) value, commercial processes ordinarily use either oxygen or oxygen-enriched air as the oxidizing medium.
It is possible to improve the BTU value of a partial oxidation product fuel or synthesis fuel by the addition of methane thereto but this is not economical because of the shortage of natural fuel. Carrying out the partial oxidation at a temperature of about 1,300° to 1,600° F. to increase the methane content has also been suggested. However, operation at this temperature level is not advisable as there is the danger of a "flame-out" and a resulting explosion. There is therefore need for a satisfactory process for the production of fuel from hydrocarbon liquids by partial oxidation using air or a fuel containing about 19-21 percent oxygen as the oxidizing agent.
According to our invention, there is provided a process for the production of fuel which comprises subjecting a hydrocarbon liquid optionally in the presence of steam to partial combustion with a fuel having a low oxygen content such as air at a pressure between about 30 and 3,000 psig and at an autogenously-maintained temperature between about 1,600° and 3,000° F to produce a product fuel comprising principally nitrogen, carbon monoxide and hydrogen, injecting hydrocarbon liquid and steam into the product fuel stream at substantially the pressure of the partial oxidation zone to cool the product fuel and heat the steam-hydrocarbon mixture to a temperature below 1,800° F. and above 1,000° F to convert at least a portion of said injected hydrocarbon liquid to methane, cooling the resulting product to condense water there from and recovering a product fuel composed principally of carbon monoxide, nitrogen, hydrogen and methane.
The hydrocarbon liquid used as feed to the process of this invention may be any refinery stream such as naphtha, kerosene, fuel oils or residue-containing oils such as whole crude, atmospheric residua, tar sand oil, shale oil or their mixtures and the like. In this connection it should be understood that the terms hydrocarbon oil and hydrocarbon liquid are used interchangeably and include oils or liquids containing minor amounts of impurities, such as sulfur, nitrogen and metals. The oil feed is preheated to a temperature of between about 200° and 900° F. preferably 250° to 800° F. and if desired mixed with steam. If the oil is liquid at preheating temperature, it is preferably injected as a steam-oil suspension into a fuel generator maintained autogenously at a temperature between about 1,600° and 3,000° F preferably between about 2,000° and 2,500° F. To prevent the possibility of a flame-out, the temperature should be kept above 1,600° F. The hydrocarbon to steam ratio is between about 10 to 1 and 1 to 5 preferably about 5 to 1 by weight. To support the partial oxidation reaction, air preferably preheated to between 500° and 1,800° F. is introduced into the fuel generation zone at an oil to air weight ratio of about 0.15 to 0.20 preferably 0.18. Pressure in the fuel generation zone is maintained at between about 30 and 3,000 psig or higher preferably between 200 and 500 psig. Product fuel composed principally of carbon monoxide, hydrogen, nitrogen and carbon dioxide leaves the generator at approximately reaction temperature.
After leaving the first fuel generation zone the partial oxidation product is mixed with additional hydrocarbon oil and steam. The hydrocarbon oil injected into the product stream may be the same type of oil used as feed stock to the first fuel generation zone although it is not necessarily limited thereto. Preferably the injected oil is a distillate oil and more preferably it boils in the naphtha range. A particularly suitable oil for injection at this point of the process is a substantially paraffinic naphtha obtained as a raffinate from a process in which the aromatic hydrocarbons have been removed. In another embodiment, a hydrocarbon oil can be fractionated into a light fraction and a heavy fraction, the light fraction being used as feed to the first fuel generator and the heavy fraction as a scrubbing medium for the removal of entrained particles of carbon from the product fuel. The resulting heavy oil-carbon slurry may then be fed to the first generator. The light fraction may also be injected into the products leaving the first fuel generation zone. It is also possible to use the light fraction as the oil injected into the second generation zone and a portion of the heavy fraction as direct feed to the first fuel generator with the balance of the heavy fraction being used as scrubbing oil.

The oil and steam are injected into the partial oxidation product fuel stream at substantially the pressure of the partial oxidation or first fuel generation zone, in an amount sufficient to reduce the temperature of the synthesis fuel to below about 1,800° F. for example, 1,000°-1,700° F. If the oil is in vapor form at the injection conditions then the oil and steam are injected as a vaporous mixture. If the oil is liquid at injection conditions then preferably it in injected into the partial oxidation product fuel stream as an oil steam suspension. The mixing may take place in the second fuel generation zone or upstream thereof.
The oil and steam are injected into the product fuel in a ratio of 0.5 to 1 to 10 to 1 parts of oil per part of steam by weight. The reaction conditions in the second fuel generation zone are such that no water is present as liquid. The residence time of the reactants in the second generation zone will vary according to the type of oil injected and the pressure and temperature within the reaction zone. Residence times of from one-half second to 2 minutes may be used although residence times of from 1 second to 10 seconds ordinarily will result in substantial conversion of most injected oils to methane.
After the injected oil is in part converted to methane in the second fuel generation zone the product fueles are subjected to cooling to recover heat therefrom. Advantageously this is accomplished by passing the product fueles through a waste heat boiler or a heat exchanger for the production of steam or in another embodiment for the preheating of the oil charge stock to the first fuel generation zone product fuel for conversion to methane in the second fuel generation zone. In either event conditions within the waste heat boiler or heat exchanger should be such that no condensation of steam to form liquid water takes place.
The cooled fuel leaving the waste heat boiler or heat exchanger then pass to a scrubbing zone. The scrubbing or clean-up of the product fuel may comprise several steps. For example, the product fuel from the heat exchanger may be subjected to scrubbing with water or hydrocarbon oil for the removal of any traces of carbon present therein.
2.2 THE DISTRIBUTION OF FUEL IN NIGERIA
The management of the Nigerian National Petroleum Corporation, NNPC, has concluded plans to convene a high level forum of all the key operators in the downstream sector of the oil and gas industry in Nigeria and to find a comprehensive and lasting solution to the fuel supply and distribution challenges facing the downstream sector.
And is expected that Pipeline and Products Marketing Company should work hand in hand in the distribution of fuel in Nigeria.
The NNPC had in the past few months adopted a number of strategies aimed at ameliorating the fuel supply and distribution challenges amongst which was the commencement of distribution of petroleum products from the Ore depot in Ondo state. Though the measures introduced by the NNPC have begun to yield positive results, it has become very clear that if all the stakeholders in the sector do not work together the problem would still linger". That is why NNPC is convening the stakeholders to work out ways all the operators in the downstream sector could cooperate to facilitate a copious supply and effective distribution of fuel and also the petroleum products in Nigeria.

CHAPTER THREE
3.1 PROBLEMS OF ADEQUATE DISTRIBUTION OF FUEL IN NIGIERA
Nigeria has four existing refineries (2 in Port Harcourt, 1 in Warri and 1 in Kaduna) which were aptly described by the Bureau for Public Enterprise (BPE) as “name plate refineries.” With a combined installed capacity of 445 barrels per stream day, the four refineries by design, would have been able to churn about 20 million litres of petrol on daily basis representing about 60 percent of the petrol need of the country in addition to diesel, dual purpose kerosene amongst other products.
However, the performance outings of all the refineries could best be described as comatose with some completely on ‘sick leave,’ due to high level of administrative incompetence (not technical), inbred corruption in government through the NNPC system, past and present servicing their masters in the Presidency.
But because they are not from certain sections of the country; not in the PDP; and not close to the people in power, such competent Nigerians would never be given the opportunity to bring in their relevant experiences to address the nation’s ever-increasing challenges in critical sectors of the economy.
The National Assembly should with all intent and sincerity please serve the
people of this country whom they are supposed to be representing by outrightly scrapping this ill-conceived and resource-draining agency now that we are talking of petroleum industry reform. The PPPRA was solely packaged by the former President Olusegun Obasanjo to service his political loyalists during his dual role as the president and the sole administrator of the nation’s oil sector (NNPC/DPR) and the agency at best, has continued in that light. Why should somebody like Ali be there if not that it’s a chop-chop arena?
The truth is that as long as the PPPRA or anything that looks like it continues to exist as an agency of the Federal Government, no single refinery can operate optimally anywhere within this country whether government or privately-owned. Mark my word!
Look at the kind of money passing through the agency for doing nothing: it does not refine, it does not even directly import products at least on the surface, it does not market. The agency just exists to confuse Nigerians with the calculus of real and regulated prices of fuels and the vagaries of the global crude oil market. How long can we continue like this?
What pricing are you regulating when artificial scarcities are deliberately created to bleed Nigerians and petrol sells for between N250 and N65 per litre depending on where you are in the country? Why is the PPPRA chairman not canvassing for a taskforce approach in the management of the nation’s existing refineries or even harmonizing per litre price across the country? What is actually the use of PPPRA to the “real” people of this country? It’s just another conduit for the misuse of public funds and that is why we keep seeing funny people take charge of the agency. Just look at the magnitude of the fund that passes through the agency on monthly basis for doing nothing and I mean nothing. No wonder to “they” scramble to head or serve in the agency.
It has severally been said that the continued existence of the PPPRA is one glaring test of sincerity of the Dr Rilwanu Lukman’s oil sector reforms. If the reform sets out to unbundled the NNPC because the organization has over the years become a mere cost centre, it should more desperately scrap the PPPRA (and the PIB- proposed PPRA) which since inception has remained a worse cost centre or rather an outright drain pipe compared to the corruption and fraud problems in the mainstream NNPC.
The conspiracy in the controversial PIB to metamorphose the PPPRA into Petroleum Products Regulatory Authority (PPRA) is an outright aberration to the entire concept of cost-cutting reforms in the nation’s oil industry.
The crucial question Nigerians should ask is: Who are the people involved in the ongoing offshore petroleum product import and NNPC’s bridging aberration? Whosoever that supervises the massive fuel import racket in this country should be challenged to publish a manifest of all the companies involved in the business, their owners (foreign partners and local associates) and the volume each contractor brings in on weekly and monthly basis from designated countries. If that can be done, it will help to unmask the masquerade behind this racket.
It is very unfortunate that all pronouncements coming from government on this embarrassing fuel scarcity issue point to the rulers’ glaring inability to tackle a most basic need of the country. And instead of seeking workable solutions to this disgraceful problem, the NNPC as usual, in place of efficient, adequate supply of oil, are spending energy and resources feeding Nigerians daily with more blame trading and excuses.
The Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mr. Mohammed Barkindo, just last week attempted yet another unsatisfactory defense. His words: “We were taken aback by a recent happening when one of the jetties diverted a large amount of petroleum products that was put at its disposal, which we had to refer to the Economic and Financial Crimes Commission (EFCC) to investigate and recover the value, if not the products.” What a shame? Did the owners of the jetty divert the petroleum products to the spirit world? Was it not into the same Nigerian market where the PPPRA was supposed to be regulating and supervising?
Why out of the over 18 licenses for private refineries dished out by Obasanjo, no single licensee even attempted to mobilize to site even before Yar’adua came with his confusion of revoking some of the licenses for what he rightly described as glaring fraud in the oil-for-infrastructure deal? It has suddenly become easier for vandals to cook out petrol and diesel than for the NNPC to churn out products from the existing refineries. These are issues we have to address with the urgency it deserves and now is the time.
3.2 SOLUTION TO THE DISTRIBUTION OF FUEL IN NIGERIA
According to NUPENG's paper, "the refineries that are supposed to be producing refined products for the end users are in a comatose state. It is a shame that the four refineries at Alesa Eleme, Warn, and Kaduna are not functioning. This is a big problem despite the huge sums of money that have been budgeted by past and present administrations towards their turn-around-maintenance and crude oil pipeline repairs.
The massive importation of petroleum products is also a big cause for concern and a drain on our scarce foreign exchange. It does not make good economic sense for the sixth largest producer of petroleum products to be involved in massive importation of petroleum products. Similarly the way and manner refined petroleum products are allocated and distributed to other stakeholders by the NNPC calls for question.
The use of selected depots for the storage of petroleum products imported by the NNPC is equally discriminatory because it helps to create artificial scarcity. There are depots with computerized equipments that the NNPC can use for adequate storage of petroleum products but they are allowed to remain fallow while the nation suffers from scarcity.
Other suggestions of the are "The huge sums of monies owed major marketers in bridging and subsidy is another headache. Most of them have refused to import products due to huge debts owed them by the government. The recent approval given for the payment of N32 billion is just a tip of the iceberg, considering over N95 billion owed them by the Petroleum products Pricing and Regulatory Agency (PPPRA).
The iss ue of vandalized crude oil pipelines especially at Chanomi creeks is another problem militating against free flow of crude oil to Kaduna and Warri refineries. The refusal by commercial banks to give loans to operators in the sector to import petroleum products is also militating against the availability of the products. The ruptured and vandalised NNPC/PPMC network pipelines that traverse the nooks and crannies of the country is another problem.
The dilapidated highways in the country is also becoming a nightmare for effective distribution of petroleum products, as oi! trucks and trailers have become victims of accidents and fire along these roads that are in state of decay. Despite the huge sums of monies allocated for the revitalisation of the railways, not much development has been noticed. The railways that used to transport petroleum products from the ports to other parts of the country has become a mere shadow of itself,
Proffering solutions to petrol scarcity, the oil workers union called on the government to immediately fix the four refineries "so that they can produce at optimum capacity and at least meet 80 percent of local consumption demand of the petroleum products market. It will.take the political will of government to make them work by reducing the bureaucratic bottlenecks involved in downstream transactions.
The bad roads in the country should be repaired, now that we are in the dry season. If the roads are rehabilitated, there will be fewer accidents and products distribution will be more efficient. We note that Federal Road Maintenance Agency (FERMA) is underfunded and must therefore be well funded and NUPENG should be on the board of the corporation as a part of the originators of the plan to set up the organization. The railway system needs to be revitalized to bring back its lost glory.


CHAPTER FOUR
4.1 SUMMARY
In the summary of this term I will put it like this that the federal government should build more refineries through public-private-sector participation while fixing the existing ones. The government should increase security surveillance on the NNPC/PPMC pipeline right of way to stem further vandalisation and carry out regular maintenance to reduce the frequency of pipeline rupture. The law enforcement agents should be given warnings to stop harassing and shooting tanker drivers doing their legitimate duties all in the name of extortion. Such erring officers should be. brought to book. The NNPC must stop the use of selective use of some depots to the detriment of others with adequate capacity. Access roads to the depots should be maintained to reduce accidents and damages to oil trucks. Petroleum Equalisation Fund (PEF) and Directorate of Petroleum Resources (DPR) officials must work on public holidays to endorse waybills to enable tanker drivers load and distribute fuel on such days because they are on essential services to the nation on such occasions.
4.2 CONCLUSION
While write this paper I notice that the NNPC does not have a monopoly to the solutions that it was willing to carry all other stakeholders along in its drive to find a lasting antidote to the fuel problem, going into a deregulated environment the downstream sector must get its act together to face these issues. Deregulation itself is not likely to solve all these challenges over night. Therefore, the sector must get together and present their own perspective on how to end the problem of adequate distribution of fuel in Nigeria.

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Carter, P. (2007). U.S. Department of State. Remarks on U.S. and International Cooperation in the Niger River Delta.

Egan, J. (1997) Niger Delta Environmental Survey Final Report Phase I; Volume I: Environmental and Socio-Economic Characteristics (Lagos: Niger Delta Environmental Survey).

Junger, S. (2007). A Human Rights, Environmental And Economic Monstrosity and Amnesty in Nigeria: Oil, Poverty and Violence.


Olajuwon, Bola (2007). "29 per cent urban Nigerians shun bank accounts, says study". The Guardian (Lagos) (Guardian Newspapers Limited, via nigeriaworld.com).