Niger Delta: FG to covert illegal refiners to shareholders in modular facilities

The Presidency at the weekend, disclosed plans to convert illegal refineries to modular projects. Senior Special Assistant on Media and Publicity to the Vice President, Laolu Akande, in a statement said that the plans are part of President Muhammadu Buhari’s new vision for oil-producing communities in the Niger Delta. According to him, modalities are 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. 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 complicated set-up. Under the plan being considered in the presidency, government could supply crude to the local refineries at a reasonably concessioned price, as an incentive to stop the current practice where illegal refiners vandalise and steal the crude. The concept would also prevent the environmental degradation of their area. This also means that marginal field operators can supply crude to the new modular refineries that would have the illegal refiners integrated. “The consideration going on now is sequel to the promises made by the Federal Government during the presidential interactive engagements in several oil-producing states 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 statement read. Some of hurdles to be crossed are especially issues around the engineering and technical ramifications of such a conversion as well as financial models that would be workable and profitable. According to the statement, 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. Recall that the issues around technical and engineering implications of how to integrate the refiners were discussed last week with industry experts and practitioners making presentations on how to implement the modular refinery scheme, a brainchild of Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources. The experts are working closely with the NNPC, Oil and Gas operators, owners of marginal fields; operators of refineries and various technical services providers to develop a workable system to develop this initiative.