The Nation Newspaper

Tag: refineries

  • ‘Niger Delta indigenes need bailout for modular refineries’

    ‘Niger Delta indigenes need bailout for modular refineries’

    Ijaw Youth Council President, Pereotubo Roland Oweilaemi, is a lawyer. In this interview with AKINOLA AJIBADE, he speaks on conditions for peace in the Niger Delta region, restructuring and the need for a bailout for the region’s indigenes interested in owning modular refineries and marginal fields, among others.

    Two years into President Muhammadu Buhari’s administration, what is your take on peace in the Niger Delta?

    Peace in the Niger Delta is inevitable and must be achieved irrespective of who is at the helm of affairs. It is important and we are working tirelessly to ensure that there is peace in the Niger Delta and Ijaw territories, and the government at the centre is trying to settle down to attend to some of our demands. It is expected that we give them some time to dress the table and attend to the problems of the Niger Delta people

    Do you buy into the modular refineries programme, especially in view of the criticism that they are not profitable?

    With due respect, I don’t want to agree that modular refineries if properly handled are not viable. I don’t agree with the proponents of that ideology. Modular refinery is a good gesture by the Federal Government. It is just to move away from oil theft, to move away from illegal oil bunkering. but the worry is that the people, who are supposed to be empowered to do this are not the ones in charge. I mean the Niger Delta people,  the Ijaw people, who are involved in one form or the other, but are not doing the oil business properly. This is the essence of modular refineries. We find out that the government is not giving the sons and daughters of the Niger Delta the opportunity to own and operate modular refineries because the conditions to get them are very stringent.The financial involvement is very huge and we do not have that kind of money. So, we are calling on the Federal Government to relax these conditions to enable us also own and operate modular refineries, so that the peace we expect will continue to be part of the Niger Delta region.

    Are you aware that DPR has reduced the initial deposit from $1million to $150,000?

    Yes, I am aware and that’s still too much? It’s too much, we want further reduction. We have the oil, but we have not been managing this oil. We don’t have a stake in it so it should be relaxed. It should be brought down that we might also participate as equal owners in the project.

    Do you have colleagues in the Niger Delta, who have applied to  the DPR , because it said it was waiting for people to submit applications?

    How can you apply for something that you knew from the onset that you cannot start? You know the requirements, you have been given the requirements and from the word go, you know that you can’t do it. There is no miracle, conditions are stringent. We can’t apply and get it concluded logically, that is why we are saying that they should relax the conditions for us to be co-owners. You can’t say that the process is open and they expect people from Niger Delta, people from Ijaw extraction, to apply. How will they apply for something that they know that they won’t get at the end of the day? You already know the condition. The involvement, the logistics to put together to get a modular refinery is huge, that is why we are saying they should bring it down please.

    Do you expect a bailout or something similar for Niger Delta indigenes?

    That is what we expect. As a matter of fact, we are calling on the government to give us a time frame of about five to 10years, to get the modular refineries set up for a group of youths in the Niger Delta and say that from a particular time of the year, pay a certain amount to the Federal Government and at the end of the payment, you will become the owner of the refinery. That is palliative.

    So, what are you doing to reach out to those in authority concerning this particular issue?

    Yes, we were talking to them. I was with my elder brother, the Special Adviser on Amnesty, and we had fruitful discussions on how we will ensure that there is peace in the Niger Delta region. Of course, you will agree with me that where there is no peace, you can’t  attract  development, so, it is our responsibility to ensure, as youth leaders, that there is peace in the Niger Delta. That is the only panacea for development in the Niger Delta and we expect the government at different strata to do some basic things for us to get this peace we are looking for.

    Ogoni cleanup, do you see the project ongoing?

    It is unfortunate that we don’t seem to see what should be happening  now on site. The process is slow and we are not pleased about it. Ogoni is not the only place, it is peculiar, but it is not the only place that requires cleanup in the Niger Delta. There are so many places that are bastardised, our farmlands are gone, our aquatic life is gone, everything is gone. Our mothers cannot farm, they cannot fish. So, we need cleanup in almost every place in the Niger Delta, but you must start it from somewhere and that is why the government has decided to start from Ogoni. However, the speed we expected is not the speed we see on ground. I am calling on the government to ensure that Ogoni cleanup exercise is given priority attention.

    Federal Government plans marginal  fields bid round before the end of this year. How prepared are the Niger Delta youths to take advantage of this opportunity?

    We are very ready and capable to own and operate marginal fields, but the problem is that some people say we are not capable. We have gone through a lot of skills acquisition. We are being trained. We have Ijaw sons and daughters, people from the Niger Delta that can own marginal fields and operate it successfully.

  • ‘Fed Govt not eager to sell refineries’

    The Federal Government is not ready to sell or concession any of its four refineries in whole or in part, Minister of State for Petroleum Resources Dr Ibe Kachikwu said yesterday.

    He said ths is because the refineries were yet to return to optimal level, operating below their capacity level, despite several years of turnaraound maintenance by the government.

    Kachikwu spoke at the 2017 edition of the National Association of Energy Correspondents (NAEC) Conference in Lagos.

    The theme of the conference is: ” PICB: Prospects and Challenges to Nigerian Oil and Gas Industry.”

    Represented by the Deputy Director, Department of Petroleum Resources(DPR) Olumide Adeleke, Kachikwu said the intention of the Federal Government to carry out the turnaround maintenance on Warri, Port Harcourt 1 &2  and Kaduna refineries years ago, was not sell them, but to prepare them for improved processing of crude oil into petroleum products.

    He said: ” We sought externally for resources to finance the rehabiltation of the  existing refineries, which was a very tall order, telling someone to invest $1billion in the refineries rehabilitation, with no equity, and wait for incremental volumes of refined products to recoup their investment.

    According to him, the actual rehabilitation work would be carried out by the original refinery builders (ORBs), with financers funding the repair work, and a joint management team comprising ORBs, Financiers and NNPC, to steer the operation of the refineries over a period of 5-6 years to bleed incremental liquids for recouping investments.

    Kachikwu said the government had not done the valuation of the refineries, let alone thinking of selling them.

    On modular refineries, he said only two of between agency 40 and 50 companies, which got the licences to operate the refineries had shown considerable interest in the project, adding that majority of them were yet to realise the task involved in setting up refineires in the country.

  • Build refineries where we’ve oil, says Emmanuel

    Build refineries where we’ve oil, says Emmanuel

    Southsouth and Southeast Governors’ Forum Interim Chairman and Akwa Ibom State Governor Udom Emmanuel has said refineries and petrochemical industries should be built where oil is explored.

    “It doesn’t make economic sense to lay sub-sea pipelines from the location where oil is explored to other parts of the nation at a cost of five billion dollars  (about two trillion naira). This amount is enough to build many modular refineries and establish seven industrial parks in the region,” Emmanuel said.

    Explaining  the reason leading to realignment of economic and political forces of the two zones in a statement yesterday, Emmanuel  applauded leaders of the zones for coming together to harmonise their economic interests and pursue inter-regional cooperation and integration.

    “If mature democracies as exemplified by the European Union (EU) could see the economic benefits of coming together, expanding markets and opportunities, I think the decision of the two zones to come together is long overdue and highly commendable.”

    The statement added: “…The ingenuity, creativity, technological wizardry of the people, if  properly utilised and harnessed can point the way towards the development and growth of the region and the nation. The region, in my opinion, represents what California is to the United States and as the saying goes “as goes California so goes the United States. The two zones will insist on appropriating the resources found within its geographical space for the advancement of its strategic interests within the larger Nigeria content. We will demand and insist on the location and utilisation of resources found in our region for the good of our people and the Nigeria. There is no reason why we should be blessed with resources and yet we lack the corresponding federal presence or infrastructure.

    “There is need for our people to look inwards and we, as the leaders, will  attract and encourage our people across the length and crannies of the nation and beyond to come home and invest. It is a new dawn for people of the two zones and we will work together to advance our mutual interest and send a signal to  interested parties that we shall not only be the land that lays the golden egg but we will demand to take part in the making of the omelette”.

  • Senate okays private-public partnership for refineries’ repairs

    •Oando gets nod for Port Harcourt plant’s job

    The Senate has finally endorsed the private-public partnership (PPP) for the repair of the country’s four refineries.

    The lawmakers kicked against the government initiative, given that the contract given to Eni/Agip and Oando to repair Port Harcourt Refinery did not follow due process.

    The Upper Legislature had suspended a contract awarded to Eni/Agip and Oando Plc to rehabilitate the Port Harcourt Refinery, claiming that it did not follow due process; the Senate constituted an ad hoc committee to probe the deal.

    At the hearing with stakeholders, panel endorsed the arrangement. The Joint Upstream and Downstream Senate Committee probe followed reports that the refinery was to be privatised or concessioned by the Nigerian National Petroleum Corporation (NNPC) with Oando and Eni as the preferred consortium.

    Its Chairman, Senator Abubakar Kyari, said: “We’ve heard extensive summations from all parties involved regarding this concession process. Inevitably, partnerships between the public and private sectors are necessary to provide the required funding to rehabilitate our nation’s refineries. We are committed to due process, and in seeking to achieve these goals, sound principles of corporate governance and extant laws must be adhered to, for the greater good of the Nigerian people. Indeed we will come up with recommendations aimed at improving transparency in the oil sub-sector of the economy and at the same time encourage investors.”

    At the event were the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, Wale Tinubu, Group Chief Executive Officer of Oando PLC, Massimo Insula, Managing Director Nigerian Agip Oil Company, and Aniebor Kraghas, Chief Operating Officer, NNPC.

    Tinubu denied  that already it had a deal on the matter.

    He said: “We’ve issued several rejoinder statements as well as clarifications by the NNPC, ENI, explicitly stating that there is no existing mandate for the concession, sale, equity transfer or privatisation of the Port Harcourt refinery or any of the nation’s refineries. As a crude exporter and supplier of refined products to the country, our expression of interest in the refurbishment and upgrade of the refineries is as a funding partner. Our proposed participation in this effort is an opportunity to drive the country forward and ensure product security is realised. We are wholly committed to the government’s vision to become a petroleum product self-sufficient country in the short to medium term, and ultimately be a net exporter. The Port Harcourt Refinery remains a national asset, under the full control of the NNPC as far as we are aware, and there is absolutely no concession deal in place.”

    Last year, President Muhammadu Buhari directed the Petroleum Resources Ministry to  engage investors with refining experience and funding capacity to partner local players that understand the downstream oil market to revamp the refineries.

    To strengthen international relations, the Italian Government through ENI (an Italian oil and gas company in which it owns 30.3 per cent shareholding), supported the rehabilitation of the country’s refineries, specifically the Port Harcourt refinery, in which it has a long history of technical involvement.

    Earlier this year, Dr. Kachikwu met with ENI CEO, Claudio Descalzi, to discuss further cooperation between the Italian firm and the government.

    The NNPC and ENI, through its local subsidiaries, Nigerian Agip Oil Company (NAOC) and Nigerian Agip Exploration (NAE), signed a Memorandum of Understanding (MoU) to promote activities that would  boost economic development.

    Kachikwu said: “There is absolutely no concession framework for the Port Harcourt Refinery or any of the refineries.

    ‘’Our mandate has always been to grow our production levels year on year, cost-savings for the country, and increased dollar revenue. To propel this initiative, we realised we needed scale-up in the technical know-how in our 100 per cent indigenously-operated refineries, as well as private sector participation to crystallise the rehabilitation programme.”

  • NNPC refineries meet 60% domestic kerosene consumption

    NNPC refineries meet 60% domestic kerosene consumption

    •House committee slams high cost of product

    The Nigerian National Petroleum Corporation’s (NNPC) three refineries in Port Harcourt, Warri and Kaduna now supply 60 per cent of Dual Purpose Kerosene (DPK), popularly known as kerosene, consumed in the country, it was learnt yesterday.

    The announcement is coming ahead of the 2019 target date for the cessation of petroleum products importation by the Federal Government.

    Group Managing Director of the NNPC, Dr. Maikanti Baru said this at a two-day Investigative Public Hearing of the House of Representative Committee on Petroleum Resources (Downstream).

    The committee was mandated to, among other things, work out a clear cut policy framework on deregulation of kerosene to avert the challenges faced by the masses in procuring the product; arrest the resurgence of kerosene explosion with attendant fatalities and investigate the disappearance of N11 billion worth of petroleum product belonging to the NNPC.

    According to Baru, the corporation’s refineries were producing five million liters of kerosene daily representing more than 60 per cent of the national daily consumption requirement of eight million litres.

    The GMD, who was represented by the Chief Operating Officer, Downstream, Mr. Henry Ikem Obih, said the balance of three million litres of the product was being imported by private petroleum products marketers.

    He noted that kerosene and other petroleum products supplied by the corporation were of high quality and meet safety standards.

    The corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, who made this known in a statement quoted him as saying that “the NNPC ensures that the entire refining output in Nigeria through its refineries in Port Harcourt, Warri and Kaduna and any products imported by it to make up for market supply-shortfalls meet the specifications of the Nigerian Institute of Standard (NIS) and Standards Organisation of Nigeria (SON)”.

    The Committee Chairman, Joseph Akinlaja, stated that the committee was deeply concerned about high cost of kerosene in the market as well as incessant explosion due to adulteration.

    He said the committee will ensure it achieved its mandate.

  • FG to spend N3.4tr on petroleum products in 2017

    FG to spend N3.4tr on petroleum products in 2017

    …requires $1.1b, $1.2b for repairing refineries
    The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, on Thursday revealed that the Federal Government would in this year spend N3.4trillion on the importation of petroleum products.
    Addressing newsmen in Abuja, he refuted reports that quoted him to have said that government was concessioning its refineries.
    He said that government has no plans to concession the refineries but it is only making arrangements for private financing of their repair. The minister denied the claims that Oando has won the contract for financing the repair of the refineries.
    According to him, Nigeria that consumes 35million daily presently has domestic refining capacity of six million liters, which is about 25% of the demand.
    “The importation of products even between January and December of this year, amounts to 20million metric tonnes and a total amounting of N3.4 trillion. The logistic cost of that importation shipping clearing and all that is about N1.34trillion since the same one year period,” the minister said.
    Owing to this domestic and demand situation, the government had to plan for the improvement of its domestic refining capacity.
    Kachikwu noted that government raised a technical and steering committees on the financing of the refineries that its report will be presented to the National Assembly and Federal Executive Council upon conclusion.
    He however noted that what has been so far established is the magnitude of work that is required in the entities.
    The minister said that apart from piping, about $1.1billion, $1.2billion (depending of the category), will be required to fix the refineries.
    His words: “Internally, we have been able to determine the amount we want to do this work in terms of what work is required to be done. And the total cumulative amount if I am not mistaking is the $1.1, $1.2b type category depend on the refineries with specific breakdown. That of course does not include the cost of piping.”
    Explaining why government has decided to deal with the Chioda, Sapiem and GGC, he said that Chioda built Kaduna refinery, Sapiem built Warri refineries while CGC built the PortHacourt refineries.
    These companies, according to him, have the designs, engineering outlay and upgrade capability for the refineries.
    Today, the reality is still that the reality for downstream product surges that very few people will undertake the financing.
    “So that is why we have created a business model that tie them to the Direct Sale Direct Purchase (DSDP) Programme and that is still working and that is still work in progress.
    “When they finish this and are done with the analysis, I will expect that they will then invite everybody who is interested to the commercial terms set out formally…before we get to FEC, National Assembly and Mr. President. We haven’t reached there and so nobody can say contracts have been given.”
    Kachikwu advised the International Oil Companies to invest in building refineries in Nigeria in order to avoid the negative effects of dip in oil prices.
    He said more importantly, we need to address IOCs in terms of what they need to do to help local refining because if you encourage all these refining capabilities whenever they run out of crude availability we need to look at them why are you taking out crude when you can get the same pricing equivalent in local refining.”
    In terms of the incentives or guarantee for the corporations that would finance the repair of the refineries, he said that there will incremental volumes, access to sales to cushion the challenge in the markets in terms of pricing.
    He revealed that the Organization of Petroleum Exporting Countries (OPEC) is reaching out to its non-members including the US on measures to control the glut in the market.
  • Modular refineries: Fear of increased gas flaring grips FG

    Modular refineries: Fear of increased gas flaring grips FG

    • Promises to control operations
    Following  investors’ bid to establish modular refineries, the Ministry of State for Petroleum, Dr. Emmanuel Ibe Kachikwu on Thursday expressed fear that the rate of gas flaring in the country will rise.
    His Senior Technical Adviser on Investment, Dr. Tim Okon, who represented him in Abuja during the presentation of the report on “New Nigeria Oil &Gas Framework and Policy”, however vowed that the government will control the operations of the refineries.
    His words: “Modular refineries will worsen our flare. We have to use economics of scale. If we have many refineries they will accentuate problems. So we we will have to control them.”
    He announced that the Nigerian National Petroleum Corporation (NNP) will next year call for expression of interest (bids) for marginal fields, which will be opened for companies’ participation.
    According to him, prior prior to the exercise, the marginal field policy would have come into force.
    The NNPC, said the minister, will ensure that the Niger Delta gets micro businesses to do as the government is keen about providing a business friendly environment.
    He revealed that there will be a critical legislation to make gas independent of government subsidy, which has caused significant loss of revenue from the product.
    Kachikwu added that, “we want to make sure that gas can economically stand on its own.”
    He said that in the new scheme of things, government intervention in the petroleum sector will focus on developing entrepreneurs in the country to discourage “sharing money that distort political discourse and value system.”
    Before the event ended,  Kachikwu arrived in person. He said that besides oil, Nigeria is a country with deliverable resources, with an educated and aggressive populace.
    Commenting on the economic state of the nation and taking into cognizance of its potentials, he said “I imagine what Nigeria could become if we do the right thing.”
    He noted that the essence of the seven big wins is to bring out the latent opportunities in the oil and gas system to take a collaborative responsibility to assist those who really want to become players in the field.
    The minister said that the sector had been locked down by interest groups for too long positively or negatively, however time has come to open up the areas that are there.
    He pointed out that  it is now the responsibility of the ministry to assist those that have creative ideas about the industry  to “creates employment and development.”
    He recalled that he announced the concept of project 100 in Houston, which is to identify 100 Nigerians with skills, capacities and enthusiasm for the relevant assistance from government.
  • Two soldiers killed as Army destroys 13 illegal refineries

    Two soldiers killed as Army destroys 13 illegal refineries

    Troops of Operation DELTA SAFE on patrol around Iyalama Adama axis of Rivers State, have discovered and destroyed 13 illegal refineries.
    However, while no arrests were made, troops deployed at Creek 6 Houseboat Cawthorne Channel during a responce to a distress call of sea robbers attack around Ijawkiri general area engaged heavily armed sea robbers.
    According to a statement by the media coordinator, Major Abubakar Abdullahi, two soldiers were shot dead while three others sustained gunshot injuries.
    He said effort is ongoing by the Joint Task Force (JTF) to track and apprehend the suspects.

  • Ijaw youths set up committee on refineries

    Ijaw youths under the aegis of the Ijaw Youth Council (IYC) Worldwide have constituted a technical committee on modular refineries.

    They said the committee would work out modalities of bringing investors to participate in the proposed  refineries in the Niger Delta.

    IYC President Mr. Eric Omare, yesterday in Yenagoa, Bayelsa State, said youths were opposed to  moves by the government to bring investors for the project.

    He said to achieve their aims of developing oil-producing communities, the refineries must be driven by the communities, with investors decided by them.

    Omare said: “The high-powered technical managerial committee comprising distinguished Ijaw people has been mandated to source investors.”

    He said the idea to set up the committee was borne out of requests by people to source investors for the project.

    The IYC president said the Niger Delta people had the capacity to source investors to operate the refineries.

    He said if the government sourced investors, the refineries would toe the line of oil and gas industry dominated by foreigners to the detriment of the Niger Delta people.

    Omare said: “An example that our people have the capacity to source investors is the case of Gbaramatu people. As we speak, the people of Gbaramatu have secured more than $200million investment by foreign people who are ready to invest in the Gbaramatu modular refinery underway.

    “What they did at Gbaramatu was that they agreed with the Delta State Oil Producing Development Commission that no other projects would be executed at Gbaramatu and that the money should be channelled towards the building of modular refineries. They have secured foreign investment to build the refinery.

    “This is the concept IYC believes should be followed in the Niger Delta, not the government sourcing investors because if it sources investors, politicians and people from other parts of the country will hijack the concept to the detriment of the Niger Delta people.

    “Now, closely related to the reason we are advocating that our people should be allowed to source investors is that if you observe well, through the amnesty programme, people that became beneficiaries had never seen guns before.

    “Today, we have people that are called oil thieves and all sorts of names. This programme is targeted at them. The moment you allow the government to source investors, those people will not benefit from the programme.”

  • Troops destroy illegal refineries in Niger Delta

    Troops of the Joint Task Force (JTF), Operation Delta Safe (ODS), at the weekend raided and destroyed three massive illegal refineries in Delta and Rivers states.

    A statement from the Coordinator, Joint Media Campaign Centre (JMCC), Major Abubakar Abdullahi, said the raid was borne out of the troops’ desire to frustrate activities of economic saboteurs in the region.

    He said the raid in Delta State was conducted by the Nigerian Naval Ship (NNS) along Lapase Creek in Warri South area of the state.

    “During the raid, 11 metal tanks, five dug pits with about 1750 tons of suspected stolen crude oil and 170 tons of illegally-refined AGO were impounded”, he said.

    Abdullahi confirmed that troops of Sector 3 destroyed a large illegal refinery with multiple dumps at Alakiri in Rivers State.

    He said: “The bunkerers on sighting our troops set fire on parts of their bunkering camp to deny access to the illegal site. However, the troops on patrol put off the fire and destroyed the illegal refinery site.

    “We are, therefore, appealing to the law-abiding members of the public to support operational activities of Operation Delta Safe with valuable information.”