Why FG cannot set up refineries ―Osinbajo

ACTING President Yemi Osinbajo, on Thursday, said setting up refineries by the Federal Government would be a waste of time and resources.

He made this known, while speaking at the 2017 Conference of the Modular Refineries Association of Nigeria, held at the Congress Hall of Transcorp Hilton, Abuja.

According to him, “government cannot just go and be setting up refineries. If government sets up refineries and uses its people to run it, it won’t work. We have good examples in all the refineries
that we have seen. If you look at the refineries we have today, Warri, as well as Port-Harcourt and Kaduna, the primary reason they are not working today is that they are government run.

“Government cannot do business. Government business is to create the enabling environment for business. And then government would put some investment into it. Government should not be in the business of setting up refineries all over the place; that is just a waste of time and resources”, he explained.

Professor Osinbajo said refineries could only be successful, if privately run, because of the efficiencies and a good business model.

The acting president, therefore, assured that whoever wants a license and was able to present a sensible business kit would be given a license to operate a modular refinery, saying the government was trying to develop a very robust set of guidelines that would help
people to do it well.

“We do owe ourselves as a nation, the responsibility to exploit for ourselves, indigenously, the raw materials that we have. This is exactly the motive behind our trying to establish modular refineries across the Niger Delta particularly and wherever we can find oil and gas resources”, he added.

He said there were very serious reason for the modular refineries initiative, such as environmental reason, and the reason of law and order to ensure that the nation regulates production.

“We are the existing modular refineries able to do very well? First, they have a good business model; secondly, there is good private sector involvement in it.

“We have gotten so much interest all over the country and virtually everywhere around the world, and especially from young people in the Niger Delta, who wants to be involved. Many of the young people are coming in with investors, many of them are coming in with private
sector investors.

“But what we want to do is to bring in a new vision, which involves the Federal Government, State Governments, the communities and the private sector. So, even in establishing a modular refinery, we want to see the involvement of the Federal Government and also the State
Governments having some percentage in it. But we also want to see that the communities are involved. So, each community would be able to take up some percentage of ownership; and of course, the private sector”, he explained.

On the reasons for disaffection among oil producing communities, the acting president said because they were not involved in anyway and those resources were right there in their soil.

“They honestly want to get involved and there are no reasons why they should not get involved in it. If there is damage in the environment, if the place is taken up, they are the ones that would suffer the consequences. There is absolutely no reason they should not participate”, he said.

Earlier, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who spoke through the Director of Petroleum Resources, Mr Mordecai Danteni Baba Ladan, said at present, Nigeria has a refining gap of about 900,000 bpd to meet the daily national consumption.

Dr Kachikwu stressed that his target now was to create a robust domestic refining sector, necessary to reducing petroleum products supply costs by 70% and increasing operational flexibility; attain 50% domestic refining capacity by Q4 2018, 100% domestic refining capacity
by Q4 2019 with a projection of exporting excess capacity, thus, eliminating the need for petroleum products importation and its attendant pressure on the foreign earnings of the nation.