FG considers operation licenses for artisanal, modular refineries

The Federal Government, on Tuesday, said it will consider giving licenses to artisanal and modular refineries to operate in the Niger Delta Region.

The government said this move became imperative following its plans to harness the refining ability of youths in the region to satisfy local demand for petroleum products in the country.

The Minister of State, Ministry of Budget and National Planning, Prince Clem Agba, disclosed this at the National Summit on the Integration of Artisanal/Modular Refinery Operations into the Downstream Oil and Gas Sector.

The Summit was organised by the Federal Ministry of Finance, Budget and National Planning, in collaboration with the Office of the Senior Special Assistant to the President on Niger Delta Affairs and Economic Diversification.

Presenting his address, the Minister said this move will also restore lasting peace in the Niger Delta Region, as it would engage thousands of youths.

“The reality is that artisanal refining operations in the Niger Delta if properly integrated into the Nigerian oil and gas sector will create a positive impact in the Nigerian economy and reduce crimes and criminalities in the region.

“The challenges of refining enough petroleum products to satisfy local consumption is a major cause for concern to stakeholders who believe that the government has to encourage innovativeness to resolve the paradox,” the Minister said.

Prince Agba said this Summit proposes the integration of artisanal/ modular refineries to be able to conserve foreign exchange utilisation in the importation of petroleum products and promote socio-economic development.

“Promoting social development can put an end to restiveness, criminal and illegal refinery activities thereby sustaining peaceful coexistence in the Niger Delta region,” he noted.

He said the artisanal/modular refineries can also help to mitigate and eliminate environmental degradation associated with the so-called illegal refinery activities, crude oil theft and pipeline vandalism, and the creation of jobs for a large number of people.

He, therefore, said “the government will consider giving licenses to these local refineries to operate and officially allocate crude oil to legitimately refine.

“Although the refining process adopted by these illegal operators is crude and hazardous to the environment, the current thinking is that the entrepreneurial orientation tendencies exhibited by the operators of the artisanal refineries can be harnessed and put to good use.

“Consequently, at this stage of our national development, small scale artisanal/modular plants will yield more economic benefits and return on investments than their large-scale counterparts and with the proper government incentives may solve the problem of fuel scarcity and imports which a giant oil-producing country like Nigeria should not experience.”

In his remarks, the Senior Special Assistant to the President on Niger Delta Affairs, Senator Ita Enang, said the activities of the Artisanal refiners have posed a great danger and loses to the National treasury.

He said the activities include bursting of crude oil pipelines, taking the oil and refining crudely and illegally, selling same without remittance to the Federation Account and throwing the components they cannot process into the environment thus damaging the environment.

He, however, expressed hope that “at the end of the conference, it is hoped that the outcome will boost local refining capacity and the import-export element as well as ports and Agencies statutory charges in the Petroleum products pricing and Regulatory Agency templates will be eliminated and the cost of products will be substantially low.”


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FG considers operation licenses for artisanal, modular refineries

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