Government’s failure boosts illegal refineries’ operations in Niger Delta

Illegal refining of crude oil in the Niger Delta region may continue longer than anticipated due to the failure of the Federal Government to unveil solutions it earlier promised to stop the menace.
Experts and leaders from the region have raised an alarm of looming hostility that could upset oil output, frustrate budget implementation, and international investments even as oil communities in the Niger Delta flay elusive promises by the current administration.
The Government had said it would build modular refineries in the region in order to engage jobless youths, who resort to unruly operations and militancy activities to push out 1,000 barrels of refined petroleum products daily from each of the refineries to meet supply shortfall in Nigeria.
Modular refineries are the smallest form of refineries, although expandable.Although the move would douse tension, and create a sense of ownership, however, the Ministry of Petroleum Resources could not ascertain when the projects would become a reality, but said about three licences could be issued soon.
Apart from the three, four other applicants have also been identified especially in Edo State, Spokesperson for the Ministry, Idang Alibi said.
“There are three serious requests that stand a chance of getting a licence and taking off. There are requests, particularly from Edo State. Three are close to meeting the requirements and go offshore. The project requires so much capital up to about $100million; that is a lot of money.
“So individuals are required to come together and get foreign partnership. Then they apply and are shortlisted, and interviewed. The Ministry is very eager to get people on and they are working on it,” he said.
But some of the stakeholders, especially leaders from the region, including the National Leader, Pan Niger Delta Forum (PANDEF), Chief Edwin Clark; National Coordinator, Pan Niger Delta People’s Congress (PNDPC), Mike Loyibo; and Ijaw Youth Council (IYC), led by Eric Omare, told The Guardian they are unaware of these moves.
President, South-South Chamber of Commerce, Industry, Mines and Agriculture (FOSSCCIMA), Billy Hillary, said: “We are not seeing any discussion going forward in that direction. Illegal refineries are not beneficial to the country’s economy.
These refineries are springing up daily out of the need for these young men to be engaged and economically empowered.”
Harry said chambers of commerce across the region were directed to work with government in achieving lasting solutions to the challenges in the region.
While Nigeria is faced with perennial fuel scarcity, record huge capital flight, and increasing subsidy to import refined products, expectations were that efforts to build local refineries and rectify dangers of illegal refineries would be prioritised.
Indeed, with brimming environmental challenges, heightened security crisis, and agitations backed by demand to make the creeks dwellers benefit from oil money, experts are worried that lawlessness may escalate in the oil producing region unless government acted responsibly, and honour the promise to convert illegal refineries to modular refineries.
Past President, Nigerian Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, is optimistic that sustainable plans on refinery in the country would go a long way to address products supply challenges.
“Strategically, modular refinery will slow down illegality. But those things don’t happen in a day. The problem is that government sometimes make pronouncement without the details. The Federal Government needs to get to work with technocrats to make the plan work,” Adesanya said.
Besides, the operation remained a top concern for the Nigerian Navy, as it destroyed no fewer than 1,000 illegal refineries, and arrested many suspected oil thieves in the region between January and September of last year.
Expectations were that government would organise the youths now engaged in illegal refining of crude into consortia, and assist each consortium refine about 1,000 barrels of crude daily, but government’s inability fulfil it promises has forced some militant groups to threaten pulling out of the ceasefire agreement.
Describing illegal refinery as the highest employer of labour in the region, some of the leaders were very cynical of government’s commitment to its pledge, noting requirements for establishing the refineries were too stringent, and would deprive beneficiaries the opportunity of owning a stake in the business.
For instance, Clark insisted that the Government has not been transparent nor shown needed concern on the issue. “At the moment, we don’t know the plans of the federal government. Sometimes they will say they are inviting people for interview, sometimes they say some people have applied. We don’t know where they are going.
“You cannot say you don’t want illegal refinery, and at the same time you have no plans connecting to modular refinery, that’s why we are having problems in the area.”Like Harry, the PANDEF leader believes prioritising the plan would address the agitations from the region.
“If modular refinery has been established with the local people fully participating in it, it will reduce stealing and illegal refining; it will also reduce environmental degradation. The people in the area will have something to do.”
He wants the legalisation of the illegal refineries with proper condition and regulatory framework.PNDPC’s Labiyo recalled that the region had presented a seven- point agenda on sustaining peace in the region, especially building modular refineries, which has not been considered.