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Modular Refineries And N’Delta Dev

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The Niger Delta region has undergone a chequered history of socio-economic development in Nigeria.
The region has within the past years been at the centre stage of national discourse, as it is rife with consistent agitations over perceived development neglect and adverse environmental degradation as a result of the exploitation of its natural resources for the development of the country.
This unbridled quest for development attention on the part of the Niger Delta has no doubt remained Nigeria’s greatest albatross.
Several interventionist policies and programmes of successive governments to assuage the demands of the Niger Delta has unfortunately failed to abate the impending crisis of development in the area.
The latest of their palliative measures is the decision of the federal government to establish modular refineries in the Niger Delta.
The Federal Government’s position on the establishment of modular refineries in the Niger Delta was made explicit by the Vice President of Nigeria, Prof Yemi Osinbajo, then acting president, during a working visit to the region.
Addressing stakeholders in the Niger Delta, the Vice President disclosed that licences will be issued for the establishment of modular refineries to provide a more regulated and sustainable economic activity as a credible alternative for those who found solace in bunkering and illegal refining of crude oil as a major occupation in the region.
According to the Vice President, the decision was part of moves to stem the growing spate of crude oil theft and wanton destruction of oil facilities in the region, which has resulted into monumental economic loss to the federal government and untold damages to the natural environment.
The Federal Government’s policy on establishment of modular refineries has, however, formed the nucleus of contentious debate among experts and stakeholders.
While some stakeholders believe that the establishment of modular refineries will impact positively on the economic development of the Niger Delta, others are of the opinion that the policy is unrealistic and therefore unpracticable.
A workshop on Nigerian content, recently organised by the Port Harcourt branch of the Nigerian Society of Engineers, (NSE) and the Nigerian Content Development and Monitoring Board, (NCDMB), provided a platform for stakeholders and experts in the oil and gas industry to discuss the prospect and implication of modular refineries for the development of the Niger Delta.
Speaking on the sub-theme: Nigerian Content and Diversification of the Economy in the Proposed Modular Refineries Sub-Sector, a Chemical Engineer and University Don, Dr Awajiogak Ujile faulted the concept of modular refineries as proposed by the federal government.
Ujile, an Associate Professor and lecturer in the Rivers State University, said the idea of using modular refineries to replace “crude oil cooking” in the Niger Delta was not feasible because the operators of the illegal refineries lacked the technical capabilities to operate modular refineries.
He pointed out that the management and operations of conventional refineries in Nigeria over the years has been a dismal failure as a result of political interest and the deliberate isolation of experts with the requisite technology to drive the refineries.
According to him, the modular refineries will be no exception. “Will the modular refineries be  built for the host communities, the state, or those involved in crude oil cooking. The truth is that the policy is not practicable. The demand for domestic consumption of petroleum in Nigeria is 60 million litre per day, and a modular refinery can only produce one thousand litre per day. That can not bridge the gap in consumption need, there is need for an integrated approach, government should bring experts into its policy making”, he stated.
Dr Ujile, who is also the Chairman of the Port Harcourt chapter of the Nigeria Institute of Chemical Engineers, also raised alarm over the activities of those involved in raw “cooking of crude oil”.
He said the indiscriminate burning of the energy reserves in the Niger Delta, pollute the entire stretch of Rivers and creeks destroying aquatic creatures and depriving the people of their natural means of livelihood.
Apart from the damage to the environment,  he said, the activities of illegal bunkering has obvious health implications, for the people of the Niger Delta.
The expert who advocated for the privatisation of all refineries in Nigeria said, the privitisation policy should be devoid of political manipulations, but experts should be made to drive the policy for sustainability.
He urged the Federal Government to extend its amnesty programme to pipeline vandals and bunkerers, and get them reintegrated into the society through the acquisition of functional skills.
Dr Ujile also called on the National Orientation Agency (NOA) and other relevant bodies to embark on mass sensitisation campaign against the ills of illegal oil bunkering.
On his part, a Professor of Petroleum Engineering, Joel Ogbonna, decried the lack of full value chain  in the Nigeria oil gas sector.
He said establishment of modular refineries was not a solution to the diversification of the Nigerian economy as there were no incentives for its optimal operations.
Prof. Ogbonna, who is the Head of Department, Gas, Engineering, and Director, Centre for Petroleum Research and Training, Institute of Petroleum Studies, University of Port Harcourt, listed the challenges in the Nigeria oil and gas sector to include; aging oil production facilities, lack of enabling environment and poor technology.
He called on the Nigerian Content Development and Monitoring Board (NCDMB) to encourage Nigerian professional and indigenous companies in the promotion of Nigeria local content, through the provision of enabling policies and laws.
For sustainability in the production of petroleum product for domestic consumption and enhancing the value chain in the oil and gas sector, Prof Ogbonna recommended that every oil production company should have a refinery attached to its platform. He noted that the persistent decline in the price of oil in the international oil market was an ominous indication of the obsolesce of fossil oil in the near future, and advised that Nigeria should diversify into other sectors of economic development.
In his presentation, a technocrat and development expert, Elder Elkanah Hanson, attributed the problem of technological development in Nigeria to the lack of vision in improving inherent potentials and total dependence on foreign technology.
For the proposed modular refineries to succeed, he said the local technologies invented in the creeks of the Niger Delta should be improveed upon.
“There is nothing like illegal refineries in the Niger Delta, what we have is the first stage of Niger Delta refineries, the only thing illegal in the operation is the process of acquisition of the crude, the Nigerian Content Development and Monitoring Board should partner with the operators of the so-called illegal refineries to improve their local inventions to adulthood and ICT stage. We can’t talk of local content development when we gloss over the potentials in our local technology”, he stated.
He called for the restructuring of the present federal structure of the country to reflect the ideals of fiscal federalism and the concept of comparative economic advantage, where natural potential in the various parts of the country are fully harnessed for economic development.
Earlier in his keynote address, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr Simbi Wabote, had stated that the theme of the workshop; “Nigeria Content and the Diversification of the Economy”, was very apt, as it was in line with the Economic Recovery and Growth Plan (ERGP) launched by the federal government.
He said the policy was a 10-year vision and strategic initiative, targeted at achieving structural economic change with a more diversified economy, focused on six priority sectors; agriculture, manufacturing, solid mineral, services, construction, real estate and oil and gas.
The Executive Secretary, who described the Niger Delta Region as critical to the development  of the Nigerian economy, said before the Nigeria Oil and Gas Industry Content Development (NOGICD) Act was signed into law in 2010, all fabrication, engineering and procurement were done abroad, resulting in estimated capital flight of about $380bn in 50 years.
Over two million job opportunities were also estimatedly  lost in the Niger Delta region. The consequence was protracted development crisis in the area. He pointed out that the vision of establishing modular refineries in the Niger Delta was part of the initiatives of using local content as a key development imperative in the Niger Delta.
According to him, the estimated $28bn spent every year and $76m spent every day to import fuel in the country was huge economic burden that would have been appropriately channeled for the development of social amenities  and creation of jobs for the teeming youths in the region.
He pointed out that the federal government’s strategic initiative in correcting the unsustainable business model, was to achieve 100% local fabrication of modular refineries for production of 10% of our local needs. “Part of our Nigerian oil and gas park scheme layout has been set aside for training local modular refiners for fabrication of the units. The parks which will be operated as sites and services scheme will also host manufacturing and oil and gas service providers, we are currently working on 5 of the parks in Akwa Ibom, Bayelsa, Cross River, Delta and Imo States. We need to move away from pride in export of crude oil to pride in export of refined products”, he stated.
With the 2019 deadline  for the stoppage of importation of petroleum products in Nigeria, Engr Wabote, said the NCDMB, was working hard to ensure that the objective is achieved.

Taneh Beemene

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Oil & Energy

Partners Execute Shareholder Agreement For Brass Products Terminal

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The Nigerian National Petroleum Corporation, (NNPC), along with their partner, the Nigerian Content Development & Monitoring Board, NCDMB, and Zed Energy have executed a shareholders’ agreement for the establishment of a 50 million litre Petroleum Products Terminal in Brass, Bayelsa State.
The N10.5 billion Brass Petroleum Products Terminal project is expected to deliver an automated 50 million litre depot with two-way product jetty, automated loading bay, and 6 automated tanks for storage of 30 million litres of Premium Motor Spirit (PMS)and 20 million litres of Automotive Gas Oil (AGO) and Dual Purpose Kerosene (DPK).
While speaking at the signing ceremony, the Minister of State for Petroleum Resources, Chief Timipre Sylva commended President Muhammadu Buhari for his giant strides in the Niger Delta which is making a huge impact on the people of the area.
“I make bold to say today without any fear of contradiction that no President has impacted the people of the Niger Delta like President Muhammadu Buhari. Aside from what we are witnessing today, remember there is also the Brass Fertilizer & Petrochemical Company, the Oloibiri Oil and Gas Museum and the Oil & Gas Park in Ogbia, all under Mr. President,” the Minister stated.
Sylva added that the establishment of the Terminal further demonstrates Mr. President’s commitment to the enhancement of the livelihood of the Niger Delta people particularly, the riverine communities in Bayelsa State where people purchase products at exorbitant prices due to logistics challenges associated with transporting products to that area.
Speaking shortly after signing the agreement, the Group Managing Director of the NNPC, Mallam Mele Kyari said the Corporation was proud to be part of the project which aside ensuring products availability in all nooks and crannies of the Niger Delta, will also guarantee the nation’s energy security and generate employment.
“This Terminal will create 1,000 direct jobs during the construction phase, and over 5,000 indirect jobs during its operation. Considering the potential for employment when completed, this will definitely reduce youth restiveness in the Niger Delta area and will also address the problem of illegal refining in the area,” Kyari stated.
In his remarks, the Executive Secretary of NCDMB, Simbi Wabote stated that this milestone was as a result of strong interagency collaboration and public-private sector partnership.
“The NCDMB will continue to drive such partnerships across the industry to bring development in Nigeria,” he noted.
Earlier, the Coordinator of the Project and Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr. Bala Wunti stated that the project would enhance the economics of marine petroleum products distribution.

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Senate Hails NNPC’s Drive Towards Profitability

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The senate has commended the Nigerian National Petroleum Corporation (NNPC) for its efforts towards attaining profitability and stamping out corruption from its system.
Chairman, Senate Committee on Anti-corruption and Financial Crimes, Suleiman Abdu Kwari, gave the commendation at a hearing which was held at the national assembly complex, Abuja.
Kwari said it was heart-warming to learn that the NNPC was making great strides towards profitability and urged the corporation to sustain the gains recorded so far for the good of the country.
In his presentation at the hearing, Mele Kyari, the group managing director of NNPC, said the corporation was championing the fight against corruption in the oil and gas industry by placing measures to curb incidences of corruption across its various business portfolios and by enlisting as a partner company of the Extractive Industries Transparency Initiative (EITI).
He also said that the corporation has reported several incidences of infractions such as products diversion and crude oil theft to the police, EFCC and other investigating agencies of the federal government to stem corruption within the oil and gas industry.
In an effort to clampdown on fuel smuggling, the ministry of petroleum resources launched the operation white project in October 2019 to monitor and track the movement of petroleum products in the country.
Also in February 2021, the Department of Petroleum Resources (DPR) launched the downstream remote monitoring system (DRMS) to track the movement of petroleum products from depots to retail outlets.
“We have created an anti-corruption desk in NNPC that engages the Economic and Financial Crimes Commission (EFCC) and other anti-corruption agencies on a regular basis,” NNPC GMD said.
“The desk ensures that in all our operations, every staff complies to the code of conduct procedures with consequence management.
“We have established a regulatory compliant governance charter and transparency policy; this is a mark of our compliance to the anti-corruption strategy.
“For the first time in 43 years, NNPC, as a part of the evolving culture of transparency and accountability, published its Audited Financial Statements (AFS) for 2018 and 2019. We are going to publish that of 2020.
“The AFS is the only document that tells how a company does its transaction. We are happy that by the time the 2020 AFS will be published, Nigerians will see the dividends of our accountability.”

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Oil & Energy

Chevron Spends $10bn On Nigerian Suppliers, Service Providers

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Chairman/Managing Director, Chevron Nigeria Limited (CNL), Rick Kennedy, said the company has in the last 10 years spent an estimated annual average of $1 billion on Nigerian suppliers and service providers in line with its commitment to Nigerian Content Development.
Highlighting the opportunities and new approaches to the future of hydrocarbons at the ongoing 2021 NIPS in Abuja, Kennedy stressed the need for robust policies and regulations to address and remedy existing challenges in the oil and gas industry; digital technology/innovations; cost efficiency initiatives; sustained social investments as well as continued support for Nigerian Content Development.
Kennedy, who was represented by Monday Ovuede, director, NNPC/CNL Joint Venture, identified opportunities in lowering carbon emissions and harnessing Nigeria’s gas resources as key enablers in complementing the new approaches to future of hydrocarbons in the Nigerian oil and gas industry in the post COVID-19 era.
According to him, the global community has continued to scale up the collaboration towards lower carbon emissions, adding that Chevron supports global efforts to reduce carbon emissions and is actively investing in operations to improve environmental performance while also working with industry to develop new innovative technology and best practices to achieve these objectives.
He emphasised that CNL’s gas strategy is to end routine gas flaring and build a profitable gas business through a portfolio of projects, and stated that in Nigeria, CNL, with its joint venture (JV) partners, the Nigerian National Petroleum Corporation (NNPC), has progressively reduced routine gas flaring by over 95% in the past 10 years and remained ahead in terms of maximising supply of on-spec gas into the Nigerian domestic market.
He also highlighted the NNPC/CNL’s Gas Sales and Aggregation Agreements with Egbin Power Plc, Dangote Fertilizer Limited, and Olorunsogo Generation Company Limited, while mentioning the positive impact of the West African Gas Pipeline (WAGP) through which Nigeria supplies gas to countries in the West African sub-region – specifically, Ghana, Togo, and Benin – thus, helping to boost economic development in West Africa.
Kennedy also noted that Chevron has joined other energy companies supporting the Methane Guiding Principles to reduce methane emissions from natural gas exploration and production operations through digital innovation and deployment of best practices, which include designing, constructing, and operating its facilities in a manner to reduce emissions from its operations.

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