FG to revoke idle Refinery Licenses

The  Federal Government is set to revoke the refinery licenses issued to some private investors but are yet to do any tangible work with them just as it is appealing to the international oil companies to establish signature refineries in the  country.

The  Minister of States  for  Petroleum, Emmanuel Ibe Kachikwu confirmed  this  in an  interview he granted  journalists  on the side line of the  Petroleum Technology Association of Nigeria (PETAN)  organized investors forum  at the ongoing Offshore Technology Conference (OTC), holding  in Houston, Texas, United States of America. He noted that  investors cannot just be holding the licenses without doing anything with them.

They must do something with them, he said.

“I have asked the DPR to  review the  refinery license  and withdraw those not  being used,” he said.

He also lamented the inability of  international  oil  companies operating in the country and yet refused to have  what  he  described as signature refineries.

 The Minister said that the Department of Petroleum Resources  (DPR) has been directed to revoke the licenses of those that have failed to utilize them while another new set of license would be  given to new investors  that are serious.

“I have asked the DPR to review the refinery license  and withdraw those not being used”, he said.

But some of the downstream operators that spoke to BusinessDay shortly after the conference said  that there is  no enabling environment yet to establish refineries because the  downstream sector of the petroleum industry is still  regulated.

 The operators who spoke to BusinessDay on the condition that  their names should not be mentioned said those that got the  licenses would have love to put  in place a refineries if there is  a complete deregulation of the downstream.

According  to the minister the existing  refineries  are  currently producing about   seven  million litres of  Premium Motor Spirit  (PMS)  or Petrol and that  the  government is doing everything   it  can to increase e their capacities adding  that refining  is  a major focus  area of the  government.

He stated that efforts are being made to bring private investors  that would be able to recoup their investment within a short period to become stakeholders in the refineries.

Nigeria he said would opt out of importations of refined  products  very soon.He said  by September this year  the  government would have signed up repairs terms  for refineries and this would enable them to  increase their outputs in the nearest future.

He desire to boost refining capacities is what has led to the government to encouraging Modular Refineries and co-location of refineries along with the existing ones. Each state in the Niger Delta region would have a modular refinery with private sector driving the  operations  while the state government would  provide  the land.

He said given the price instability  the industry is still facing he believes the extension of production  cut by OPEC member is ideal. He said he would work with his colleaques in OPEC to work towards  the extension of the production cut for another six months. “ The indications I have regarding this is that there are lots of willingness  among  OPEC members to extend the production cut. But we still need to engage Russia, Mexico and the rest to continue to be as vibrant as others in terms of compliance.”

 Commenting on the actual crude oil production by the country, he said, is traditionally referred to be producing  2.2 million on daily basis is often claimed but in the actual sense the country is currently  producing about 1.8 million which is the basis the OPEC exempted the country from  production cut.

Speaking on his projection for oil  production in the country in the next one year , he said:“A year from now the country would certainly be looking above the numbers that are currently existing which is 2.2 million barrels. But again let me step back, traditionally Nigeria is always given this number of 2.2 million barrels but some things like condensate which is 300,000 barrels per day  and some flits of gas are actually  added to make it 2.2 million barrels a day.

 He said in five years from now he want to see how the country can target three million barrels  per day and this is going to depend on issue around OPEC, Prices and  investments.

1.8 barrels  which is bases  Nigeria was exempted.