FG, N’Delta Illicit Oil Refiners Consider Execution Template for Modular Refineries

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NAEE says deal to exit JV cash calls could have been avoided with PIB
Chineme Okafor in Abuja
The federal government and operators of illicit oil refinery outfits in the Niger Delta have held their first tranche of meetings to review and adopt an implementation template for the setting up of modular refineries to replace existing illegal refineries in the region, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed.

Kachikwu, said yesterday in Abuja that the government had in the last few weeks held meetings with some of the illegal oil refiners, adding that they were primarily to ensure that the initiative was carefully implemented with greater considerations to the environment of the region.
The minister said this at the 10th edition of the annual Nigerian Association of Energy Economics (NAEE)/International Association of Energy Economics (IAEE) conference in Abuja.
He was represented by the Executive Secretary of the Petroleum Technology Development Fund (PTDF), Dr. Bello Gusau.

Kachikwu explained that the replacement of illegal oil refineries with modular refineries was part of the government’s wider plan for the development of the Niger Delta, and the country’s oil and gas industry, and as such wants to take care in its execution.
He said: “In the past few weeks, we have had open and prospective discussions with some of the refiners and government is assiduously working to ensure this initiative is carefully implemented without destruction to the environment.

“This will not only provide a legal job and source of income for the populace, but also contribute to our national productivity,” added the minister in his opening remarks at the conference where the NAEE said Nigeria could have avoided the troubles of cutting an exit deal to pay off its joint venture (JV) cash-call debts to its International Oil Companies (IOC) partners, if it had passed the Petroleum Industry Bill (PIB).
The government recently disclosed its plan to embrace and reorganise the activities of illegal oil refineries’ operators in the Niger Delta, into consortiums which according to the Nigerian National Petroleum Corporation (NNPC) could refine up to 1000 barrels of crude oil daily.

Meanwhile, the President of the NAEE, Prof. Wumi Iledare, said at the conference that notwithstanding Nigeria’s recent deal with IOCs to exit cash-call funding in its JV oil partnerships and also pay off outstanding debts to them, it could have saved itself the troubles of negotiating the deal if it had passed the PIB long ago.
The government in December 2016 agreed a deal with IOCs to pay off discounted cash-call debts to them on the condition of incremental oil production. The first tranche of payments to the IOCs are however expected at the end of April.

But Iledare stated that while accolades have been showered on the government for such thinking through such deal, the need for comprehensive reform of the oil sector using the PIB was still very vital.
He said: “However, let me resolutely speculate that if the industry reform has been vigorously pursued by the federal government, the need to cut the cash-call exit deal to ameliorate the cash-call toxin in the Nigerian economy and oil and gas industry performance over the years would have been circumvented.
“Thus, the need to pass the Petroleum Governance Bill cannot be over-emphasised. It is the key, in my opinion, to addressing the apparent lapses and weaknesses of the Nigeria oil and gas industry governance within the context of global best practices. That the Petroleum Industry Governance Bill has undergone the third reading in the Senate is certainly a welcome development.”