Presidency moves to transform illegal Niger Delta oil refineries
• Owners, communities to become shareholders
The presidency is making a move to make some of the illegal refiners and the local communities in the Niger Delta become shareholders in the proposed modular refineries concept of the Federal Government.
A modular refinery is one made up of smaller and mobile parts-(skid-mounted)- that are more easily fabricated and can be more quickly transported to site. They come in different sizes with varying capacities normally lower than conventional refineries with more elaborate and complicated set-up.
A presidency source yesterday said the consideration was in line with the promises made by the government during the presidential interactive engagements in several oil-producing states led by Vice President Yemi Osinbajo, to integrate the illegal refiners, rather than eliminate their operations.
But there are a number of hurdles to be crossed especially, issues around the engineering and technical ramifications of such a conversion, besides figuring out the financial models that would be workable and profitable.
However, specific consideration of how to integrate local “illegal” refiners in the oil-producing communities into the proposed modular refinery concept is now in progress with the Presidency and the Nigeria Sovereign Investment Agency (NSIA), spearheading the efforts.
At a meeting late last week at the Presidential Villa, issues around technical and engineering implications of how to integrate the refiners were discussed with industry experts and practitioners making presentations on how to implement the modular refinery initiative said to have been first proposed by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
At the meeting, the experts reported that they had worked closely with the Nigeria National Petroleum Corporation (NNPC), oil and gas operators, owners of marginal fields, operators of refineries and various technical services providers “to develop a workable system to drive the initiative, the presidency source disclosed.
Under the plan being considered, the government could supply crude to the local refineries at a reasonably considered price, as an incentive to stop the current practice whereby the illegal refiners vandalise and steal the crude. This concept will also prevent environmental degradation that the spills and damaging the trunk lines have been causing.
Also, marginal field operators can supply crude to the new modular refineries that will have the illegal refiners integrated. Another important component of the plan under consideration is to involve the current illegal refiners and their communities as shareholders while the Niger Delta Development Corporation (NDDC) and the NSIA will also hold substantial holdings/equity sufficient to make the smaller refineries operational as a business and a going concern.
To facilitate effective community engagements, Memorandum of Understanding (MoU) will be established under the plan with the affected communities determining their share, while the government will supervise the implementation, which would be driven largely by industry operators and the communities.
Mr. Laolu Akande, Senior Special Assistant to the Vice President, Media & Publicity confirmed that a meeting was held last week on the issue, adding that the presidency was actively working to deliver on its promise of a new vision in the Niger Delta.
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