The Federal Government, on Thursday re-considered earlier stance on modular refineries initiative, declaring that it would no longer allow the proliferation of such refineries across the Niger Delta region.
Recall, the Federal Government had a couple of weeks ago stated that it would encourage the setting up of modular crude oil refineries in oil-producing communities across the Niger Delta, while it also planned to legalise illegal crude oil refiners and inculcate them into the modular refineries initiative.
Speaking in Abuja, Minister of State for Petroleum Resources, Ibe Kachikwu, disclosed that having small modular refineries scattered across the length and breadth of the Niger Delta would heighten environmental degradation, worsen gas flare and increase the problems of the region.
Kachikwu was speaking at the presentation of the report of the New Nigerian Oil and Gas Sector Governance Policy Consultation Workshop held in Aberdeen, Scotland, by Nigerians in Diaspora Organisation, Europe, United Kingdom and North Aberdeen.
He was initially represented by his Senior Technical Adviser on Fiscals, Timothy Okon.
Kachikwu disclosed that it is considering a situation where modular refineries would be located only in areas where its products would be easily evacuated and where getting feedstock to them would not be cumbersome.
He said the Federal Government is commissioning a broad study that would lead to the development of an intelligent plan for the construction of modular refineries in the region.
He said, “It is important to clear a misconception, especially as it has to do with modular refineries. Setting up smaller modular refineries in so many places in the Niger Delta would worsen gas flares in the region and also bring about environmental challenges.
“It is critical to develop an integrated approach and plan to modular refineries construction in the Niger Delta, ensure that they are properly optimized and are not scattered everywhere. If the refineries are scattered everywhere they would not provide significant economic benefits to the country.”
In addition, Kachikwu stated that the Federal Government would commence the gas flare commercialization initiative by June this year, and would conduct marginal fields licensing round next year.
He said the gas flare commercialization initiative would provide an opportunity to people interested in participating in gas flare capture using technology, while the marginal fields bid round would provide access to stranded reserves, especially to competent companies that would make significant contributions in growing Nigeria’s reserves.
Kachikwu noted that the Nigerian oil and gas sector, had over the years, being locked down by a few interest groups, adding that the Federal Government is aware that it is time to open it up.
He said the Federal Government would utilize opportunities with Nigerians in the diaspora to develop the oil and gas sector, stating that it values the cooperation and assistance of the group.
Also speaking, the chairman, Nigerians in Diaspora Organisation, Europe, United Kingdom and North Aberdeen, Paul Eke, commended the Federal Government for its efforts at reforming the oil and gas sector and for constantly engaging with the group on the ‘Seven Big Wins’ initiative.
In the report presented to the Minister, the group recommended a major review of the petroleum sector every 10 years. It stated that the Federal Government and Ministry of Petroleum Resources, should consider the post-implementation of the ‘7-Must-Wins’, by establishing a rolling ten-yearly review and implementation cycle.
The group further called for the establishment of a team in the Ministry to manage the long-term rolling ten-yearly reform and improvement cycle and support the Petroleum Sector Strategy Policy and Performance Advisory Committee (PSSPAC).
The group also called for daily interactions with potential investors as well as best industry practitioners in the oil and gas space all over the world, while it stated that it is ready and willing to collaborate with its Nigerian colleagues to develop systems and best practices that would incentivize investments in the industry.
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