How to turn artisanal refiners into strategic partners in the oil-producing areas, by VP

How to turn artisanal refiners into strategic partners in the oil-producing areas, by VP

The integration of artisanal and modular refinery operators into mainstream oil and gas sector promotes the inclusion of more local content in the industry and advance the use of home-grown technology in the refining of petroleum products, according to Vice President Yemi Osinbajo, SAN.

Prof. Osinbajo stated this in an address delivered virtually at a National Summit on the Integration of Artisanal and Modular Refinery Operations in Nigeria on Tuesday.

Much of the artisanal refining of crude oil in Nigeria is done illegally, and security agencies have been at loggerheads with refiners, blamed for much of the pollution in some Niger Delta states.

But according to the Vice President, “we are confident that the integration of artisanal and modular refinery operations into the oil and gas sector will not only promote the inclusion of more local content in the industry; it will advance the use of home-grown technology in the refining of petroleum products and also curtail illegal oil activities in the Niger Delta regions.”

It will be recalled that following Mr President’s directive, Vice President Yemi Osinbajo in 2016 embarked on a tour of oil-producing communities in the Niger Delta, in a bid to address lingering issues in the region.

This was preceded by the President’s meeting with Niger Delta leaders under the aegis of Pan-Niger Delta Forum, (PANDEF) which led to the PANDEF 16-point demand to the Federal Government and was subsequently captured in the Federal Government’s 20-point agenda to develop the region.

“One of the nagging issues we were confronted with during my tour was how to deal with the proliferation of artisanal refinery and its attendant negative environmental impact. Our solution was to promote the establishment of modular refineries,” Prof. Osinbajo recollected.

Speaking on how to resolve the issue, the Vice President noted that “these artisanal refiners will be seen as investors and considered for strategic equity partnerships with technical and financial partners.

“This vision is hinged on the commitment of this present administration to develop the region and ensure that the people of the region benefit maximally from the wealth of their land. Indeed, the New Vision speaks to a progressive partnership between the federal government, state government, private sector, and the local communities.”

Explaining the Federal Government’s position on the adoption of a viable model, Prof. Osinbajo said, “the transition from artisanal refineries to modular refineries has been delayed because of the operators’ expectation that this process will be fully underwritten by Government.

“However, what this framework envisages is a private sector-led partnership with equity participation from the state government or its agencies, registered local cooperative societies and the integration of regional refinery stakeholders, with the private investor having majority equity.”

While calling on stakeholders at the summit to fashion a workable and viable blueprint that will guide and facilitate the integration of artisanal and modular refinery operators, the Vice President said the gains of a seamless integration are enormous.

“We are confident that the integration of artisanal and modular refinery operations into the oil and gas sector will curtail illegal oil activities in the Niger Delta regions.

“It will also promote the availability of petroleum products, stabilize prices, eliminate shipping costs and provide employment opportunities for the youths in the region and Nigeria in general,” Prof. Osinbajo stated.

In addition, the Vice President said “we recognize that with enough artisanal and modular refineries in the country, we should be able to conserve foreign exchange now utilized for the importation of petroleum products and promote socio-economic development.

“The resultant proliferation of employment opportunities will also have the effect of curbing youth restiveness which is largely driven by a dearth of socioeconomic opportunity. With most of the youth engaged in productive endeavours, the region will be able to turn a new page in its history.”

The summit was convened by the Senior Special Assistant to the President on Niger Delta Affairs, Sen. Ita Enang.