No Going Back On “Modular Refineries” Incentive For Illegal Refiners – Kachikwu. Nigeria’s oil minister Emmanuel Ibe Kachikwu has confirmed that there is no going back on plans to include illegal refineries in the Niger Delta in a new government incentive initiative aimed at dissuading perpetrators from attacking oil infrastructure. This is also seen as away to prevent pipeline attacks and oil thefts.
Speaking at the Nigerian Association of Energy Economics (NAEE) on Monday, Kachikwu outlined the government’s idea of grouping all illegal refiners in the Niger Delta into the so-called ‘modular refineries’ consortium concept.
Kachikwu, who was represented by the Executive Secretary of Petroleum Technology Development Fund, PTDF, Mr. Bello Gusau, said that already, the Federal Government had in the past few weeks, open and constructive discussions with some of the illegal refiners to review and adopt an implementation model for setting up modular refineries to replace existing illegal refineries in the region.
“The government is assiduously working to ensure that this initiative is carefully implemented without any hindrance,” Kachikwu noted
Nigeria’s government decided last month to supply crude oil to illegal refineries at a ‘reasonable price’, as a kind of incentive to the illicit small refiners to stop them from trying to break pipelines or vandalize facilities to get oil.
Also speaking, President of NAEE, Mr. Wumi Iledare, lamented that the volatility in the foreign exchange market in the country, the collapse of crude oil prices, and insecurity of assets in the Niger Delta have continued to pose a challenge to managing the cost of petroleum operations in Nigeria.
He disclosed that the low oil prices would have offered a comparative advantage to Nigeria’s economy, if the country had harnessed the economic potentials in the entire petroleum industry value chain before now.
However, he noted that the potential to grow the economy using oil and gas was still there to grab.
A group part of the Niger Delta Youth Coalition for Peace and Progress (NDYCPP), is calling upon the government to create a committee to identify and document local refineries in the Delta, so that the authorities have the full picture of the number and refining capacity of the local communities.
As early as at the beginning of April, Niger Delta states signaled that they were ready and open to discuss the modular refineries concept with the government and try to reach a solution to the oil theft and illegal refining.
Pipeline vandalism and attacks, which have crippled Nigeria’s crude oil output in the past year and a half, were the reasons that won the country an exemption from OPEC’s production cuts.
Now Nigeria plans to increase its crude oil output. The country is planning to complete repair work on the Forcados pipeline and maintenance at the Bonga field by July. Following these, crude oil production should rise to 2.2 million barrels daily, from 1.27 million bpd in March. Last month’s figure was affected by maintenance at Bonga, which produces 225,000 bpd.