Kachikwu’s recipe on modular refineries

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By Pius Mordi‎

But for the fixation of Nigeria’s policy makers with the grandiose, a lot of the country’s infrastructure and developmental challenges may have been overcome. When potholes appear on roads and major highways, they are left to degenerate into deep gullies so a big contract can be awarded and the leader will commission the rehabilitated and reconstructed road in elaborate ceremonies.
Despite the proven effectiveness of small and medium scale enterprises as the sure route to industrialisation, the attention paid to supporting such ventures is perfunctory even when special purpose vehicles such as SMEDAN and People’s Bank were floated. Sooner than later, they become relics of government’s numerous failed projects that lacked political will.
For over three decades now, Nigeria has been grappling with crippling fuel scarcity down to limited capacity. Having built huge refineries in Port Harcourt, Warri and Kaduna, policy makers had laid a template on the only way they know refineries can be built. Some years down the line with no funds for government to build new ones and the failure of repeated attempts at getting private entrepreneurs to key into the venture, our rulers had given up on developing local refining capacity, preferring to import products under various dubious deals.
We had been fed series of stories on why Nigeria cannot build new refineries and having been lulled into lethargy by conveyor belt of cheap dollars from sale of crude oil, successive governments opted to routinely approved huge sums in dollars for the turn around maintenance (TAM) of the existing refineries that were noted more for being idle meeting the nation’s need for products. When the refineries manage to revive into gear, albeit temporarily, they never operated beyond 30 percent of installed capacity. The cabal in the Nigerian National Petroleum Corporation (NNPC) had created a massive money spinning machine for themselves in the name of TAM. With so much easy cash, recruiting any political office holder into the money machine was a fait accompli.
It was deemed more convenient to import refined products from every conceivable place, including Cote d’Ivoire, a neighbouring West African country that had no crude oil deposit in commercial quantity. This was at a time that as a self-appointed regional policeman under military rule, our rulers sent in the army to enforce the return of a democratically elected government that had been over thrown in Sierra Leone. Such was the incongruity of Nigeria’s embarrassing situation that a British prime minister famously stated that Nigeria imported what it could produce and exported what she did not have.
While the rape of the national treasury was in full swing, a group of unemployed but employable and resourceful young men decided to show the country how it could be done. With no access to modern equipment or formal training in refining technology, they proceeded to build makeshift facilities where they could extract petrol, one of the hundreds of products derivable from crude oil. What the young men did was nothing new. It was just a throwback  from the civil war days when Biafran engineers had built modular refineries to power their war machines when they lost Port Harcourt which is home to Nigeria’s then only refinery.
Those facilities are what the Nigeria government calls illegal refineries which the military has been hunting down in the Niger Delta area. Dozens of the “illegal refineries” are regularly destroyed by a special joint operations team set for the purpose and announced with fanfare. Yet, for every such refinery destroyed dozens more spring up.
Nigeria is blessed with a unique blend of oil reputed with having about the lowest sulphur content, making it relatively uncomplicated and easy to extract petrol.
After more than 30 years of being in denial on the imperative of going for the modular refineries model, it took the authoritative voice of Dr. Ibe Kachikwu, Minister of State for Petroleum, to give official voice to this inevitable option.
“Modular refineries are going to be the answer to our problems in the future. We talk about militants and their agitations, the reality is that until we begin to put things in place that would have these so-called militants find opportunities in the sector, the destruction [of oil pipelines] is going to continue”. That was Kachikwu’s recipe for checking fuel scarcity and curbing the incessant vandalism of pipelines.
In approving the establishment of modular refineries, we do not have to wait for foreign investors to respond with hundreds of millions of dollars neither is the acquisition of expensive modern equipment imperative. By now, it should be clear to any discernible policy maker that it is absolutely impossible to eliminate the illegal refineries while the nation remains in the throes of a debilitating shortage of refined products. The cost of the official delusion is massive. With guidelines set on the location and minimum technology to be adopted as well as environment protection issues in the establishment of such refineries, the government would allocate agreed quantities to each refinery at market rates, collect tax from the companies and, more importantly, illegal operations would be eliminated while providing jobs for the teeming young men and women. Of course, there will be challenges to overcome while the fine details and contentious issues are straightened out. Ultimately, it would be a win-win situation for all.
Apart from those benefiting from the present chaos in the oil industry, Kachikwu’s bold idea should attract immediate and unconditional support as it has huge potentials to herald a new era not just for the industry but also for the Niger Delta region and the country.

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