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Artisanal refinery

Artisanal refinery

In The Face Of Declining National Refining Capacity, Artisans Have Come Together In The Creeks Of The Niger Delta To Offer “Solution” With Other Forms Of Refineries.

THE growing cases of artisanal refining of stolen crude oil across the Niger Delta by locals has spurred renewed interest in the demand for the establishment of modular refineries for diesel and premium motor spirit.

Proponents of these refineries are of the opinion that it remains a sustainable option for the country, because the current production level of the four national refineries, which are undergoing rehabilitation after a decade of neglect, is not adequate for current domestic consumption. Besides, the problems associated with product distribution network due to poor road infrastructure has become unbearable.

Recently, the army raided an illegal bunkering site at Makoba Beach, close to the port in Port Harcourt, and found over 5,000 drums loaded with illegally refined diesel as well as four tanker trucks containing 132,000 litres of diesel combined and a badge with 165,000 litres of stolen diesel.

The Commander of 2nd Amphibious Brigade of Nigerian Army, Port Harcourt, Brigadier General, Stevenson Olabanji, made the disclosure.

As a response to unemployment and depletion of livelihood-dependable resources, some youths in the Niger Delta have been involved in oil theft and refining of crude oil, using local technology. The consequence of their illegal bunkering and local refining is the catastrophic oil spills in the environment, which in turn, has destroyed the eco-system, as well as killing plants and animals that community livelihood depend upon.

Irrespective of incessant onslaught like the raid on Makoba, artisanal refining remains a thriving business in the creeks of the Niger Delta, especially, in Okrika, Ogoni and Kalabari areas of Rivers State.

Artisanal refining involves stealing crude oil through artificial holes bored on pipelines, and refining the oil by heating in locally crafted drums, having been added with some chemical additives. In most cases, those involved in this illicit business, use diesel as primary product.

A former artisan crude oil refiner, Tambari Legborsi, told The Guardian in Bodo, that it involves a sophisticated process, whereby, someone who is sufficiently skilled, breaks into high-pressure pipelines to siphon crude oil, which is then moved in drums to the site where the distillation is done.

According to him, most fishing communities in the creeks that lack access to imported refined petroleum products have remained the major destination of locally refined petroleum products.

“We mainly produce diesel and low grade petrol, which we sell to remote communities in the creeks who cannot have access to NNPC imported fuel. Ours is cheap. We also supply to some taxi drivers, who complain that imported fuel is too expensive. It was indeed a thriving business around the creeks of Bodo, until recently when stakeholders in the community appealed to us to desist from it, because of the adverse impact on the environment. I must confess our activities really compromised the environment. I decided to quit after the loss of some of my friends during a fire incident in one of our refining sites,” he said.

Legborsi explained that though some of those involved in illegal refining of crude oil in the creeks may not want to leave the nefarious business, because they don’t have to pay for the crude, he is of the option that the government can easily frustrate those involved in the artisanal refining out of the market if modular refineries start sprouting from every nook and crannies of the Niger Delta.

Ogoni leaders had during their visit to the immediate past president, Goodluck Jonathan, pointed out that the problem of youth-driven illegal and artisanal refining, which not only makes the government to lose huge revenues, but complicate the environmental crisis in recent times, cannot be effectively combated through a law and order approach without addressing its root cause.

When The Guardian visited an artisanal refining site at Bilie community in Rivers State, several boats were parked in the creek, waiting to be loaded with refined diesel that would be supplied to remote riverine communities that are in desperate need for cheap fuel.

The chief distiller, who identified himself as Big Tom, explained that they get their crude supply by siphoning the product from pipelines inside the mangroves from where it is shipped to their refinery in the creeks. He explained that the stolen crude is heated in drums to produce low-grade diesel fuel.

According to him, before the Joint Task Force commenced incessant attacks of their bases in the creek, his team used to produce more than 90 drums of diesel a day.

“Though, the business is inundated with risk, this is now our source of livelihood. If the government is willing to grant us license to operate modular refinery and provide access to funds to finance our business, we will stop what we are doing. We have the skill to refine crude, all we need is finance to operate legal refining plants,” he said.

The Dean, Faculty of Social Sciences, University of Port Harcourt, Prof. Henry Alapiki, noted that the failure of government to create jobs and unavailability of refined petroleum products in rural communities have given rise to the emergence and increase of artisanal refining across the region.

To stem this, he advocated for the provision of modular refineries in the region, as this will reduce unemployment, boost local economy and make refined petroleum products available for mostly local consumption. According to him, there is need for industrialisation of the region through the establishment of cottage, industrial parks and small-scale industries.

In a research report, titled: Private gain, public disaster, social context of illegal oil bunkering and artisanal refining in the Niger Delta by Professor Ben Naanen of the University of Port Harcourt and Mr. Patrick Tolani, chief executive of Redeemers Relief Agency International based in Oxford, United Kingdom, they argued that oil theft and artisanal refining are rooted in socio-economy factors that have been at play in the Niger Delta and the nation since the discovery and exploitation of oil from the 1950s. This, they pointed out, has made the people to develop an anti establishment, anti state and anti corporate psychology.

They recommended the establishment of modular refineries as one of the solutions to illegal artisanal refining-related socioeconomic crises in Nigeria. They argued that integrating the illegal artisanal refiners into the modular system and regulated refining will pose minimal danger to the environment and that the country can leverage on the existing skills of the artisanal refiners in a regulated modular refinery system.

Naanen, a strong advocate of modular refineries in Nigeria and chair of the Niger Delta Environment and Relief Foundation (NIDEREF), told The Guardian that artisanal refining was drastically reduced in his native Bodo community, because of constant enlightenment programmes, which involves community leaders and those involved in nefarious activities of oil theft and refining.

United Nations Environment Programme (UNEP), in its report on Ogoniland, had revealed that an increase in artisanal refining between 2007 and 2011 has been accompanied by a 10 per cent loss of healthy mangrove cover over 307,380 square metres.

Former Group Managing Director, Corporate Planning, Nigeria National Petroleum Corporation, Dr. Joseph Ellah, insisted that government should aggregate and assign refinery licence holders to team up with crude oil owners to establish refineries, including modular ones.

He explained that the reason why the 25 companies that were issued licenses to build refineries in the last administration could not commence operation was, because they could not obtain guarantee for long term crude oil supply and a controlled products market that could not enable them carry a credible feasibility studies to ascertain their return on investment, and therefore, could not obtain the necessary credit required to construct refineries.

The Petroleum and Gas Senior Staff Association of Nigeria (PENGASSAN) also believes that constant and regular supply of crude oil to the Port Harcourt refinery will help boost the country’s self sufficiency in fuel production.

Enthralled by the resolve of the Federal Government to ensure local production of petroleum products, PENGASSAN canvassed the speedy passage of the Petroleum Industry Bill (PIB) and encouragement of local entrepreneurs to build refineries and make Nigeria a major refined products exporting country.

The chairman, Port Harcourt refinery chapter of PENGASSAN, Fidelis Ighodaye, told The Guardian that once the Federal Government is able to guarantee regular supply of crude oil to the refineries, the country would be able to attain self sufficiency in no distance time.

“What we need from Federal Government at the Port Harcourt refinery is the constant and regular supply of crude oil, we are ready to operate at full blast and produce products for local consumption,” he said.

The Port Harcourt refinery, which is currently producing at 60 per cent of the installed capacity of 210,000 barrels of crude oil per day, is anticipated will be operating at 90 per cent capacity and above by the first quarter of 2016, if the current rehabilitation is sustained and completed.

Ighodaye also blamed the non-passage of the PIB for the reason most multinational oil companies, which have refineries outside Nigeria, are reluctant to invest in the sector.

Another advocate of modular refinery, director, Centre for Gas, Refining and Petrochemicals, University of Port Harcourt, Professor Godwin Igwe, said besides the economic benefit of creating jobs, it would also help to end incessant fuel scarcity experienced in the country.

1 Comment
  • emmanuel kalu

    Most of the problem of the Niger Delta area could be solved if the govt effectively use this illegal refineries to good use. By financing and regulating the modular refineries, they would be giving this youth jobs and helping develop the region. modular refineries also cost less to operate and build, and it can be deployed where it is most needed. The problem with nigeria is not lack of human capacity or resources, it is a lack of creative and innovative leaders. we have criminals as governors, and useless law makers. If this governor where pushing and financing this modulars, they could be generating revenue for the state, increaing employment and reducing the importation of fuel.