Modular Refineries And N’Delta Dev


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