How realistic is FG’s plan to transform Niger Delta’s illegal refineries?

The President Muhammadu Buhari’s New Vision for oil-producing communities in the Niger Delta, is emerging as an idea is 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, presidency sources have disclosed.

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, Professor Yemi Osinbajo to integrate the illegal refiners, rather than a scorched-earth policy that seeks to eliminate the operations of such refiners.

But sources, according to a report by Sweetcrudereports, explained 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.

At a meeting recently 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 Buhari presidency modular refinery initiative said to have been first proposed by Dr Ibe  Kachikwu, the Minister of State for Petroleum Resources.

At the meeting the experts reported that they have worked closely with the 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.

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 report said 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 trunklines 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 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 communities’ share, while the FG would supervise the implementation, which would be driven largely by industry operators and the communities.

Mr Laolu Akande, Senior Special Assistant to the President, Media & Publicity, Office of the Vice President confirmed that a meeting was held last week on the issue adding that the Buhari presidency is

actively working on all fronts to speedily deliver on its promise of a ‘new vision,’ in the Niger Delta.