Ndoni Refinery: To Be, Not To Be?

The objective and vision of the Federal Government to deregulate the downstream sub-sector of the oil and gas industry may not have achieved the desired result. Virtually all government and private sectors investments and initiatives in floating refineries to meet local consumption of petroleum products are yet to see the light of the day. The puzzle everyone has been battling with is to ascertain the problem with a view to solving it.

Federal Ministry of Petroleum Resources, the Directorate of Petroleum Resources and Nigeria National Petroleum Corporation (NNPC) have in the past decade granted provisional licenses to a couple of local and foreign investors for the establishment of refineries in the country, yet none can be said to have come on stream, several years after getting the greenlight from relevant agencies.

The reasons for the anomaly may not be far-fetched as investors persistently accuse the government of insecurity and not providing the enabling environment for smooth take off of the approved refineries.

Perhaps, that is why President Goodluck Jonathan’s administration is currently pushing forward the Petroleum Industry Bill (PIB), which is before the National Assembly to remove all the bottlenecks and constraints facing the oil and gas industry as to ensure that investors have confidence in the sector. Not even the proposed refineries under the Public Private Partnership (PPP) initiative is working out.

In the Niger Delta region of Nigeria, the hub of the country’s oil and gas industry, a couple of refineries which had been granted licenses were yet to take off many years after licenses were approved, primarily because of obvious constraints.

In 2008, the Rivers State Government announced plans to build a refinery at Ndoni in Ogba/Egbema/Ndoni Local Government Area (ONELGA) of the state. In furtherance of this plan, the government reportedly signed a Memorandum of Understanding (MoU) with an indigenous firm-Shayaz Nigeria Limited for the building of the 200 metric tonnes refinery.

News of the proposed project was a cheerly one across ONELGA and Rivers State as the coming on stream of the refinery was expected to, not only improve access to petroleum products which had, over the years become difficult but will also provide jobs to the people with attendant positive multiplier effect on families.

Investigations have revealed that the proposed Rivers State refinery at Ndoni was estimated to cost N3 billion and was to be built in modular form within 18 months.

It was to have an equity share holding of 20 per cent for Rivers State government and 80 per cent for Shayaz Nigeria Limited and  foreign partners and expected to provide over 3,000 jobs.

Unfortunately, the failure of the project to take off has remined a puzzle to many, particularly people from the catchment area of the proposed project, considering the initial enthusiasm shown by parties involved in the project.

Chief  Valentine Odili Obi, a native of Ndoni who spoke to The Tide on the state of the project, said Shayaz Nigeria Limited had cleared the project site on three different occasions, preparatory for commencement of the project but said government inability to provide the operational licence for it, was major contributory factor to the delay in its take off.

“We appeal to government to initiate action towards the commencement of the refinery project, because it will create job opportunities, improve the economy of the state and federal government and reduce violence in the society”, said Obi who is also community liaison officer of Shayaz Nigeria limited for the project.

Obi who said the provision of the operational licence was critical to accessing funds for the project explained that Shayaz had over the years made several efforts, including inviting its foreign partners to meet state government officials, but the efforts were to no avail.

According to the Shayaz’s CLO, his company had met all the conditions required of it, including the deposit of a $1 billion as collateral with Bank PHB, for the commencement of the project.

“Maybe, the Petroleum Industry Bill which is at the National Assembly may also be an additional cause of delay as the bill when passed into law is expected to provide incentives to investors”, Obi said.

Also speaking to The Tide, Barrister Henry Odili who said he was brought in as legal consultant to Shayaz Nigeria Limited in respect of the Ndoni refinery project insisted that only the Commissioner for Energy and the state government were in the best position to tell the people what was happening to the project.

Odili said that government, at various times during negotiations on the project, raised various issues including the deposit of $1 billion, which he said, Shayaz through Bank PHB provided the collateral and security for the project, as regulated by the state government.

According to him, as one issue was being solved, others cropped up. “I couldn’t be sure if we were being sincerely dealt with”, he lamented.

He alleged that the acquisition of operational licence by government was characterised by intrigues and everything said about it was in the realm of rumours.

“I haven’t sighted the licence”, he said, insisting that  government needs to implement its side of the MoU.

The Shayaz legal consultant accused some highly placed and influential individuals in government of hatching a game-plan to take the refinery project away from the company. “It was as if they were looking for an excuse to stop the project”, he declared.

It was learnt that under the MoU, the state government was to provide the land, operational licence, EIA security, and the enabling environment while Shayaz provides the feasibility study, funding and management of the project in 20- 80 per cent equity shares to the state and investors respectively.

However, in an exclusive interview with The Tide, the State Commissioner for Energy and Natural resources, Hon. Okey Amadi said the Ndoni refinery was not in view for now as government is putting finishing touches towards floating a $2.5 billion refinery at Ikpokiri in Ogu/Bolo local government area.

Hon. Amadi explained that though he inherited the Ndoni refinery proposal, but the state government’s priority for now is the modular refinery to be built by foreign investors from United States of America (USA), Britain, Germany and Korea in Ogu/Bolo.

He affirmed that government has already entered into a Memorandum of Understanding (MoU) with the investors on 20-80 percent equity shares, adding that the partners are already constructing administrative and residential blocks at Trans-Amadi industrial layout, Port Harcourt for smooth take off.

The Commissioner did not however rule out the possibility of the Ndoni refinery project in future as, according to him, there is “nothing wrong with Rivers State playing host to two or more refineries as they will provide thousands of jobs for the teeming unemployed youths, and business climate and opportunities for  businessmen and women.

But the puzzle still remains: will Ndoni proposed refinery for which land has been acquired and cleared thrice since Odili’s administration till date ever come on stream someday? Time will tell!

Goodluck Ukwe & Donald Mike-Jaja