Modular refineries: How workable is FG’s proposal

ACTING President Yemi Osinbajo, last week in Port Harcourt, the Rivers State capital, announced to the admiration of Niger Deltans of Federal Government’s plan to license the operation of modular refineries.

InsideNigerDelta has, on several occasions, made the above call as a way of arresting the nagging challenge of illegal bunkering, crude oil theft and environmental pollution that have become a pastime in the oil-rich region.

With the current dwindling fortune of crude oil price at the international market coupled with high exchange rate,  Nigeria  economy has been on the decline.

It, therefore, becomes imperative that the country seek alternative to keep the economy running, hence the idea of the modular refineries could just become one of the ways the country can edge out of the woods.

What are modular refineries?

Speaking to InsideNigerDelta, former commissioner representing Ethiope West, Okpe and Sapele local government areas of Delta State, Chief Henry Ofa defined modular refinery as “a mini refinery built within a capital limit and time compared to the traditional refinery that takes time and huge capital,” adding that it is “a plant constructed on a skid structures that can be easily moved to locations of comparative advantage.”

According to him, “modular refineries are built in units and can achieve between 25, 000 and 30, 000 barrels per day and they are one of the ways to guarantee peace and boost development in Niger Delta region and beyond.”

Benefits of modular refineries

There are immediate and remote benefits that can be drawn from operating modular refineries, particularly the Nigeria’s Niger Delta.

With the scourge of unemployment ravaging the country, establishment of modular refineries can boost capacity to create employments as illegal refining plants could be merged.

To Chief Ofa, “pipeline vandals would be engaged meaningfully,” observing that the “Nigeria market is big enough to consume the products and export surpluses.”

Ofa, who advised the FG to go ahead with the plans and involve all stakeholders without prejudice, added that it will “reduce the importation of refined crude oil products and expand the country’s refining capacity” as well as “temporarily boost foreign exchange.”

Coordinator of the Centre for Peace and Environmental Justice (CEPEJ), Comrade Sheriff Mulade and the National President of the Foundation for Human Rights and Anti-Corruption Crusade (FHRACC), Alaowei Cleric Esq., listed the benefits accruable from the idea of licensing modular refineries.

Supporting the submission of Ofa, Comrade Mulade said the idea, if crystallised, “will create legitimate employment opportunities thereby reducing poverty within the Niger Delta Region, reduce criminality as youths will be gainfully employed, busy in legitimate business and would think less of being involved in illegal bunkering and criminality thereby creating a peaceable environment for enterprise to thrive.”

Mulade, who’s chairman of Kokodiagbene community in Gbaramatu Kingdom of Warri South West Local Government Area of Delta State, added that the idea will “create basis for expertise, professionalism and further training in the oil and gas industry, reduce the abuse and degrading of the Niger Delta environment and government will earn more revenue through tax and increased production of both crude and refined oil.”

Describing modular refineries as the best approach to tackling illegal oil bunkering and stealing of crude oil in the region, Cleric stated that :This has been the suggestion of the Niger Delta people that instead of clamping down on the local refinery operators or destroying the local crude oil reservoirs as well as their camps to further degrade the environment, let the government give licence to the illegal bunkerers to operate.”

According to the activist, some of the benefits include halting the deregulation crisis in the oil and gas ndustry.

“You will see that there will be surplus of petroleum products in the country to the extent that we may not even need to depend on the imported products.

Niger Delta will turn out to be Apapa Wharf where marketers will throng into the region to buy the products. We are very certain that if the government legalises these illegal bunkering business in the region, it will no doubt address youth restiveness.

The menace of sea piracy in the creeks will also be curtailed if the government allows the local operators to participate in the crude oil production.

That of course, also means an  equity participation by the indigenous communities in the petroleum industry and it will go a long way in dousing the tension in the region,” he noted.