Downstream Petroleum Industry
Downstream – From Refinery to Customer
The downstream sector encompasses the refining, storage, distribution and marketing of petroleum products:
• Refining Process: Crude oil is processed and refined into more useful products;
• Storage: The products from the refining process are stored at depots via pipeline, land (trucks & rail) and sea (barge/vessel). These storage facilities are also called tank farms or terminals
• Distribution and Marketing: Petroleum products are distributed from storage locations to the end-user directly or through retail outlets
The major products produced by a refinery are, Kerosene, Premium Motor Spirit (“PMS” - Gasoline), Automotive Gas Oil (Diesel), Fuel Oils, Liquefied Petroleum Gas (LPG), Lubricating Oils, Naphtha and Tar
Figure 1. - Schematic Representation of the Downstream Business
The Nigerian Downstream Sector
The Federal Government of Nigeria (“FGN”) participates in the activities of the oil industry (upstream and downstream) as well as actively supervising it due to its strategic importance to the economy.
In the downstream industry, FGN regulates and participates through the following agencies / bodies:
Nigerian National Petroleum Corporation (“NNPC”) –NNPC has powers and operational interest in refining, petrochemicals, product transportation and marketing. NNPC has nine wholly-owned subsidiaries, two partly owned subsidiaries and nineteen associated companies that manage the upstream and downstream activities. Those relevant to the downstream business are the Pipeline & Products Marketing Company (“PPMC), Kaduna Refining & Petrochemicals Company Limited (“KRPC”), Warri Refining & Petrochemicals Limited (“WRPC”) and Port Harcourt Refining & Petrochemicals Limited.
Department of Petroleum Resources (“DPR”) – DPR is an arm of the Federal Ministry of Petroleum Resources and has responsibilities for the following:
• Issuing of permits and licenses for all activities connected with
The downstream sector encompasses the refining, storage, distribution and marketing of petroleum products:
• Refining Process: Crude oil is processed and refined into more useful products;
• Storage: The products from the refining process are stored at depots via pipeline, land (trucks & rail) and sea (barge/vessel). These storage facilities are also called tank farms or terminals
• Distribution and Marketing: Petroleum products are distributed from storage locations to the end-user directly or through retail outlets
The major products produced by a refinery are, Kerosene, Premium Motor Spirit (“PMS” - Gasoline), Automotive Gas Oil (Diesel), Fuel Oils, Liquefied Petroleum Gas (LPG), Lubricating Oils, Naphtha and Tar
Figure 1. - Schematic Representation of the Downstream Business
The Nigerian Downstream Sector
The Federal Government of Nigeria (“FGN”) participates in the activities of the oil industry (upstream and downstream) as well as actively supervising it due to its strategic importance to the economy.
In the downstream industry, FGN regulates and participates through the following agencies / bodies:
Nigerian National Petroleum Corporation (“NNPC”) –NNPC has powers and operational interest in refining, petrochemicals, product transportation and marketing. NNPC has nine wholly-owned subsidiaries, two partly owned subsidiaries and nineteen associated companies that manage the upstream and downstream activities. Those relevant to the downstream business are the Pipeline & Products Marketing Company (“PPMC), Kaduna Refining & Petrochemicals Company Limited (“KRPC”), Warri Refining & Petrochemicals Limited (“WRPC”) and Port Harcourt Refining & Petrochemicals Limited.
Department of Petroleum Resources (“DPR”) – DPR is an arm of the Federal Ministry of Petroleum Resources and has responsibilities for the following:
• Issuing of permits and licenses for all activities connected with