The Federal Government is considering a policy that will compel operators of major oil and gas exploration and production firms to refine 20 per cent of their oil production in-country, the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has said.
According to the Nation, Kachikwu gave the hint at the groundbreaking ceremony of the 5,000 barrels of oil per day (bopd) modular refinery being developed by Waltersmith Refining and Petrochemical Company at Ibigwe field, Ohaji-Egbema Local Government Area of Imo State.
The minister said the Federal Government would soon announce a policy to require operating companies to refine locally at least 20 per cent of the crude oil they produce, with the percentage graduating to 50 per cent in the next five years.
“We have no option or we will consistently stay in the abyss of lack of processing while we export all the raw materials,” he added.
The modular refinery project is being executed with 30 per cent equity financing by the Nigerian Content Development and Monitoring Board (NCDMB) and additional $35 million debt facility from the African Finance Corporation AFC). It is expected to start production in December 2020.
Kachikwu said the Federal Government’s policy on modular refineries is an integral part of the 14-point agenda for reducing militancy in the Niger Delta region. The plan, he noted, is to set up modular refineries in oil producing communities and use them to create jobs and absorb the militants. “We would take some of the good skills sets they have, polish them and put them into the system,” he said
According to him, 10 of the 38 licensed modular refineries had made appreciable progress in the development of their projects and the first one is expected to deliver products between December 2018 and January 2019. “From modular refineries, we will be able to process about 200,000 barrels of crude and put them into the system.”
He said the Federal Government was engendering the establishment of modular refineries through the financing model being managed by the NCDMB and had also granted free custom duty charges and other waivers to enable the investors bring in their equipment.