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Oil/Gas Reform: FG Moves to Legalize ‘Illegal, Artisanal oil/Gas Refiners

By Zaveshe Ofei

The federal Government has pledged to legally mainstream the mini/modular refineries otherwise called illegal refiners into the country’s oil refinery processes and programmes with the aim to bring sanity into the system and the overall development of the nation.

The federal government budgets and spends through the Nigerian National Petroleum Corporation (NNPC) several billions of naira on security to protect the pipelines which still suffer high degree of vandalism across the country.

The disclosure was made in communique emanating from a 2-day summit declared open by the Vice President Prof. Yemi Osinbajo SAN, which included the Minister of State for National Planning, Prince Clem Agba and the Senior Special Assistant (SSA) to the President on Niger Delta Affairs, Senator Ita Enang and other top government officials in Abuja.

It added: “Upon successful formalization of the mini refineries, part of the funds budgeted for security agencies and pipeline protection could be applied in setting up small scale mini/modular refineries whereby integrated practitioners would now be employed to refine for the nation.

The Communique tasked the Ministry of Petroleum Resources to establish a desk under the relevant department for modular and mini refiners’ operations and develop framework to organize the mini refinery operators into legal operations as it obtains in the mining sector.

 It added as a matter of urgent matter that a committee be setup comprised of the Office of the Vice President, Office of the Senior Special Assistant to the President on Niger Delta Affairs, Ministry of Budget and National Planning, Ministry of Petroleum Resources and its agencies, Office of the National Security Adviser, Ministry of Environment, Federal Fire Service (FFS), representatives of the Federal University of Petroleum Effurun, Ahmadu Bello University, Zaria (ABU), the Petroleum Training Institute (PTI), the Petroleum Technology Development Funds, Nigeria Content Development and Monitoring Board, Niger Delta Development Commission, the Presidential Amnesty Office, Nigeria Extractive Industries Transparency Initiative (NEITI), Representative of Domestic Refinery Operators amongst others and impaneled to address: development of model for establishment of mini refineries, their integration into the economy, provision of feedstock (crude oil), safety and environmental best practices in the petroleum industry and generally facilitate implementation of this initiative of integrating domestic mini refineries and establishing/mainstreaming them to boost in-country refining capacity;

It urged the National Assembly and other relevant stakeholders are to be engaged to ensure mainstreaming the relevant legal framework into the National legal system to ensure seamless integration of mini and modular refineries into the national economy by addressing issues addressed herein in the Petroleum Industry Bill (PIB), the statement said.

That the DPR should develop guidelines for licensing of mini refining operations, and prescribe graduated fees commensurate with the production capacity;

In order to ensure national technical regulations and standards in the design, the resolution further explained that testing and construction of all critical infrastructure, as well as safety and compliance with all extant environmental laws, regulations and standards in the petroleum industry, are adhered to in all phases of the mini and modular refineries.

 “That a special fund be set up by the Central Bank of Nigeria (CBN) in collaboration with Sovereign Wealth Funds, Multi-lateral funds and the Federation Account as was done in the Power Sector reforms to address modular and artisanal refineries.

 “Agencies like NNPC, PPPRA, NDDC, NASENI, PTDF, PEF, NCDMB, Presidential Amnesty Office, DPR, etc., who are stakeholders in the oil industry should each identify, mentor and sponsor at least one Pilot each of the mini refinery model developed in the country, as corporate social responsibility to the nation.

“That a technical team be set under the Ministry of Science and Technology and the Presidency, National Agency for Science, Engineering and Infrastructure (NASENI) to coordinate the team of experts and researchers to undertake field visits to mini refineries for the purpose of ascertaining the level of technological needs and standards and to recommend appropriate technologies for mini refiners.

 “That the Petroleum Training Institute (PTI) Warri, Federal University of Petroleum Resources (FUPRE), Ahmadu Bello University, Zaria (ABU) and NASENI should be engaged and on their own engage the mini refinery operators on standard construction of modular and mini refineries which shall be subject to approval by Standard Organization of Nigeria (SON) and other relevant bodies before it is deployed for purchase by domestic artisanal refiners;

“That State Governments with NNPC, DPR should create refinery parks in each state for co-location of artisanal refineries where their activities will be monitored, environment protected, and any bye-product of one plant being processed by another plant within the co-operative park;

“As part of their corporate social responsibility each major oil company operating in Nigeria should be directed to mentor and sponsor at least one modular or mini refinery operation in their area under the overall supervision of the Ministry of Petroleum Resources and its relevant agencies (NNPC, DPR, and NCDMB);

“That laws prohibiting hot-taping of pipelines should be stringent enough to deter perpetrators, but feedstock (crude oil) should be availed mini refiners that apply for it after verification of the purposes and payment.” The Communique added.

In attendance and signatory to the communique includes: Prince Clem Agba, the Minister, Budget and National Planning, (State), Senator Ita Enang, Senior Special Assistant (SSA) to the President, Niger Delta Affairs, Dr. Babayo Ardo, Permanent Secretary, Federal Ministry of Niger Delta Affairs, Engr. Kamoru Busari, Director, Ministry of Petroleum Resources, Abuja, Dr. Kabiru Nakaura, Chairman of Board, National Bureau of Statistics, the Executive Vice Chairman Prof. Mohammed Haruna, National Agency for Science and Engineering Infrastructure (NASENI), Idris O. Musa, Director General, National Oil Spill Detection and Response Agency (NOSDRA), Colonel Millian Dixon Dikio (rtd), the Interim Administrator/CEO, Presidential Amnesty Office, Abuja, Mr. Effiong Akwa, the Sole Administrator/CEO, Niger Delta Development Commission (NDDC), Dr. H. A. Adimula, Ag. Principal/CEO, Petroleum Training Institute, Warri, Delta State, Dr. Peter C. Ekweozoh, the Director, Environmental Science and Technology Department Federal, Ministry of Science and Technology, Abuja, Dr. Akenn Sunday M. Department of Petroleum Resources, DPR, (Abuja), Prof. I.A.M. Dabo, Mini Refinery Development Research Team, ABU, Zaria and Mr. Godwin Sunday, National Chairman, Domestic Refineries Owners Association of Nigeria (DROAN).

The others include: Engr. Dr. Omonigho B. Otanocha, Federal University of Petroleum Resources, Effurun, Delta State and Anthony Abiye George, Head, Oil & Gas Nigeria Extractive Industries Transparency Initiative, Abuja.

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