Federal government plans to convert holdings of illegal refiners to share holdings in the proposed modular refineries to be set up soon. This is part of President Muhammadu Buhari’s New Vision for oil-producing communities in the Niger Delta. Details of the arrangement being worked out is 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.
Those who have working knowledge of the new thinking in government said that the consideration going on now is sequel to the promise made by the Federal Government to oil producing communities during the presidential interactive engagements in several oil-producing States led by the Vice President Yemi Osinbajo to integrate the illegal refiners, rather than the policy that had hitherto sought to eliminate the operations of such refiners.
However it was gathered that there are still a number of grey areas to be addressed especially issues around the engineering and technical ramifications of such a conversion, besides figuring out the financial models that would be workable and profitable.
At a meeting late last week 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 fit this new initiative,” a source said.
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 sites. They come in different sizes with varying capacities normally lower capacity than conventional refineries with more elaborate and complication set-up.
Under the plan being considered in the presidency, the Federal Government could supply crude to the local refineries at a considerable price, as an incentive to stop the current practice whereby illegal refiners vandalise and steal crude oil from pipelines. This concept would also prevent the environmental degradation that the spills and damages of trunklines have been causing to oil producing communities.
Also, marginal field operators will 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.