Nigeria Government promotes establishment of modular refineries

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President Muhammadu Buhari

The Federal Government of Nigeria has promoted the establishment of modular refineries to bring an end to illegal refining of oil and gas in the Niger Delta region.

The Vice President of Nigeria, Prof. Yemi Osinbajo who was speaking virtually during the National Summit on Integration of Artisanal/Modular Refinery Operations into the Downstream Oil and Gas Sector 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 said, one of the nagging issues they were confronted with during their tour was how to deal with the proliferation of artisanal refineries and their attendant negative environmental impact adding that their solution was to promote the establishment of modular refineries.

He said the desire to provide solutions to key developmental issues led to the birth of the New Vision for the Niger Delta.

“This vision is hinged on the commitment of the present administration to develop the region and ensure that the people of the region benefit maximally from the wealth of their land. Indeed, the New Vision speaks to a progressive partnership between the Federal Government, State Government, private sector, and the local communities.”

Prof. Osibanjo said the transition from artisanal refineries to modular refineries has been delayed because of the operators’ expectation that this process will be fully underwritten by Government.

“However, what this framework envisages is a private sector-led partnership with equity participation from the State Government or its agencies, registered local cooperative societies, and the integration of regional refinery stakeholders, with the private investor having majority equity. This is the sustainable model.

“I believe that this summit will fashion a workable and viable blueprint that will guide and facilitate the integration of artisanal and modular refinery operators into the mainstream oil and gas sector.”

He added that they are confident that the integration of artisanal and modular refinery operations into the oil and gas sector will not only promote the inclusion of more local content in the industry; it will advance the use of home-grown technology in the refining of petroleum products and also curtail illegal activities in the Niger Delta region.

Also speaking at the Summit, the
Minister of Budget, Clem Agba said 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 who said the 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 added that promoting social development can put an end to restiveness, criminal and illegal refinery activities thereby sustaining peaceful coexistence in the Niger Delta region.

“It can also help to mitigate and eliminate environmental degradation associated with the so-called illegal refinery activities, crude oil theft and pipeline vandalism, and creation of jobs for a large number of people. It will also reduce capital flight and build new sets of industries, especially petrochemicals “

He also said, while many oil producing countries have modular refineries, Nigeria has none and the failure of the successive governments except the current Administration, has propelled the locals to establish artisanal refineries, and by so doing demonstrating innovativeness and ingenuity.

“As we may all be aware, local refining has grown swiftly over the past years, providing communities with employment opportunities and filling the supply gap of refined fuel in the Niger Delta and Nigeria at large The industry fills an economic vacuum where local communities suffer the impact of oil
extraction but see none of the economic benefits. Communities in the Niger Delta view artisanal refining as doing what they can to survive in the absence of mainstream livelihoods.

“To execute this mandate, It is worthy of note that as part of the strategy to reposition the Nigeria oil and gas industry, the current Administration has developed a roadmap of short and medium term priorities aimed at developing a stable and enabling oil and gas landscape with improved transparency, efficiency, stable investment climate and a well-
protected environment, tagged “7 big
wins” which was launched by His
Excellency, President Muhammadu Buhari GCFR President in October 2016.”

He further said with the experience of the so-called illegal artisanal oil refineries in Nigeria’s Niger Delta region, stakeholders are unanimous in their view that if the right legal and economic framework is put in place, the illegal business of refining stolen crude could be rightly modelled to salvage the comatose oil industry in Nigeria.

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