SHOW COMMUNICATION THE PROJECT MANAGEMENT OF LARGE PETROCHEMICAL COMPLEXES: A COMMENT Siyanbola Tomori

Joe Bidders paper (Engineering and Process Economics, 1976, l(I): 55, raises interesting questions about the practical problems involved in the planning, construction, 2nd financing of large petrochemical complexes in the western developed world. The main purpose of this note is to comment on the relevance of his analysis to the Nigerian situation. Although Bidder was concerned with a hypothetical project, he touched on issues which are very pertinent in a developing country like Nigeria which is planning and in the process of building large petrochemical complexes. Emphasis in the country has shifted from the mere exportation of crude petroleum to the processing and refining of petroleum products. Bidder identitied a variety of economic and technological ressons for the trend towards the building of massive, fuily integrated petrochemical complexes at a single location [ 1I. It seems that this consideretion have also influenced and is still influencing the Nigerian authorities in their attempt to develop the petroleum sector of the economy. In the preceding and current National Development Plans, 1970-74., and 1975 -80 respectively, considerable investment has been earmarked for the mining and quarrying sector because of its recognition as the main engine of growth. Therefore, policies are aimed at achieving the following objejectiiies, among others 121: (1)Active state participation in mining operations. (2) Diversification of mineral products.

(3) Policy development in the area of conservation of the countrys mineral resources. (4) Research into efficient extraction methods and wider apphcation of minerals. (5) Manpower development and accelerated transfer of technology. (6) Achievement of internal self-sufficiency in the supply of petroleum products. (7) Effective distribution network for petroleum products. (8) Export of petro-industry products. (9) Commercial utilization of gas, and (10) Involvement in the oil services sub-sector. To make these objectives realisable, massive capital allocation has been made in the current Plan period, and the government has stated that in exploration, dril!ing, production, r-fining, distribution and marketing, an amou~t of W4.535 billion (# 1= $ 1.60) would be required. Out of this, it is envisaged that p9 2.531 billion will go to mining, and the remaining W 2.004 billion will be used . to cover refining, liquefaction of gas and other industrial projects in the sector 131. It must be emphasized that these figures relate to total expenditure in the sector. The figures were further broken down p-eject-by-project in the Plan document. For example, it is estimated that the acquisition of interests in the oil producing companies will cost # 542 million, while W 300 million will be required for the building of products pipeline. Undoubtedly, this latter amont compares with the case discussed by Bidd-r in his paper.

SHOW COMMUNICATION THE PROJECT MANAGEMENT OF LARGE PETROCHEMICAL COMPLEXES: A COMMENT Siyanbola Tomori

Joe Bidders paper (Engineering and Process Economics, 1976, l(I): 55, raises interesting questions about the practical problems involved in the planning, construction, 2nd financing of large petrochemical complexes in the western developed world. The main purpose of this note is to comment on the relevance of his analysis to the Nigerian situation. Although Bidder was concerned with a hypothetical project, he touched on issues which are very pertinent in a developing country like Nigeria which is planning and in the process of building large petrochemical complexes. Emphasis in the country has shifted from the mere exportation of crude petroleum to the processing and refining of petroleum products. Bidder identitied a variety of economic and technological ressons for the trend towards the building of massive, fuily integrated petrochemical complexes at a single location [ 1I. It seems that this consideretion have also influenced and is still influencing the Nigerian authorities in their attempt to develop the petroleum sector of the economy. In the preceding and current National Development Plans, 1970-74., and 1975 -80 respectively, considerable investment has been earmarked for the mining and quarrying sector because of its recognition as the main engine of growth. Therefore, policies are aimed at achieving the following objejectiiies, among others 121: (1)Active state participation in mining operations. (2) Diversification of mineral products.

(3) Policy development in the area of conservation of the countrys mineral resources. (4) Research into efficient extraction methods and wider apphcation of minerals. (5) Manpower development and accelerated transfer of technology. (6) Achievement of internal self-sufficiency in the supply of petroleum products. (7) Effective distribution network for petroleum products. (8) Export of petro-industry products. (9) Commercial utilization of gas, and (10) Involvement in the oil services sub-sector. To make these objectives realisable, massive capital allocation has been made in the current Plan period, and the government has stated that in exploration, dril!ing, production, r-fining, distribution and marketing, an amou~t of W4.535 billion (# 1= $ 1.60) would be required. Out of this, it is envisaged that p9 2.531 billion will go to mining, and the remaining W 2.004 billion will be used . to cover refining, liquefaction of gas and other industrial projects in the sector 131. It must be emphasized that these figures relate to total expenditure in the sector. The figures were further broken down p-eject-by-project in the Plan document. For example, it is estimated that the acquisition of interests in the oil producing companies will cost # 542 million, while W 300 million will be required for the building of products pipeline. Undoubtedly, this latter amont compares with the case discussed by Bidd-r in his paper.

0 farm a view whether he wished to this contractor to execute the complete

project or whether he wished to seek other alt~srnatives.