THE Federal Government is perfecting plans to supply crude oil directly to illegal refiners in the Niger Delta as part of President Muhammadu Buhari’s New Vision for oil-producing communities in the Niger Delta.
As details of the plan emerged on Sunday in Abuja, it was learnt that an idea is also now being worked out to explore how some of the illegal refiners and the local communities in the region can become shareholders in the proposed Modular refineries concept of the Federal Government.
According to top Presidency sources, the consideration going on now is subsequent to the promises made by the Federal Government during the presidential interactive engagements in several oil-producing States led by the Vice President Yemi Osinbajo to integrate the illegal refiners, rather than a scorched-earth policy that seeks to eliminate the operations of such refiners.
The Presidency explained on Sunday though that there are a number of significant 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 on how to integrate local ‘illegal’ refiners in the oil-producing communities into the Federal Government’s proposed modular refinery concept is now in progress with the Presidency and the Nigeria Sovereign Investment Agency, NSIA, spear-heading efforts,” Presidency sources volunteered.
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 Buhari presidency modular refinery initiative at a meeting last week at the Presidential Villa, Abuja.
The idea was said to have been first muted by Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources.
It learnt that at the meeting, the experts reported that they have worked closely with the Nigerian National Petroleum Corporation (NNPC), Oil & Gas operators, owners of marginal fields, operators of refineries and various technical services providers “to develop a workable system to develop this initiative,” a presidency source disclosed.
The Presidency explained that a modular refinery is a refinery 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 capacity than conventional refineries with more elaborate and complication set-up.
The sources said that under the plan being considered in the presidency, “the Federal 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 would also prevent the environment degradation that the spills and damaging the trunk lines have been causing.
“Also, marginal field operators can also supply crude to the new modular refineries that would 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 Commission (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, an MOU would be established under the plan with the affected communities determining the community’s share, while the Federal Government would supervise the implementation, which would be driven largely by industry operators and the communities.”
Senior Special Assistant to the President, Media & Publicity, Office of the Vice President, Laolu Akande, confirmed that last week’s meeting deliberated on the issues as the Buhari
Presidency “is actively working on all fronts to speedily deliver on its promise of a ‘new vision,’ in the Niger Delta.”
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