DPR to revoke 25 idle private refinery licences

Of the 32 licences issued to qualified investors to build refineries, only seven have been been able to meet the terms of the project.

This is according to the report on the project, sent to the Minister of State for Petroleum Resources, Ibe Kachikwu, by the Department of Petroleum Resources (DPR) after the April 2017 deadline for monitoring development in the sub-sector.

It is to that effect that the Federal Government has directed DPR to begin the process of withdrawing the licences of the 25, assumed not serious in delivering results.

The report, which undertook a comprehensive review of the activities leading to establishing the proposed refineries, in the past two years, said despite the extension of time given the firms, “there is nothing on the ground to justify still retaining the licences.”

It stated further that the Minister had given approval for revoking the permission order on the holders of the licences.

At the inception of the programme, it was projected that private refineries would be refining about 1.4 million barrels of crude oil per day.

But the report stated that out of the lot only Dangote Refinery has started work, while Orient Refinery, which obtained approval licence to expand its capacity has been making some progress.

It said that government’s plan to go into modular refineries is to replace the revoked licences with the new programme.

However, throwing more light on this, the DPR Director, Mordecai Danteni Ladan, said the two years given the licencees was enough to have shown work done.

“We know that accessing funds for investment from financial institutions have been very difficult, and the Nigerian banks are not solvent enough or do not have enough confidence in the midstream sector to invest, the investors needed to have gone offshore for funds”, the DPR boss said.

Ladan said there would be a meeting with the affected licencees, the Minister and DPR during which they would be properly briefed about government intention, as it concerns the refinery projects, adding that the modular refinery scheme will be open to all to apply after now.

Confirming this while speaking at the ongoing Offshore Technology Conference (OTC) in Texas, United States, Kachikwu said the Federal Government was willing to provide an enabling environment that allows for the thriving of private refineries nationwide.

The Minister added that reforms were ongoing to re-position the nation for self-sufficiency in production and exportation of petroleum products.

Kachikwu said the measure would minimise the pressure on demand for foreign exchange for importation purposes.

On plans to reduce gas flaring effect on the economy, he restated government’s continued resolve to build a strong collaboration with the World Bank on the Global Gas Flaring Reduction Energy and Extractive Global Practices (GGFR).

The national deadline for gas flare-out remains year 2020 while the target for the global initiative is 2030, the Minister said.

He disclosed that his ministry had unveiled the National Gas Flare Commercialisation Programme to unleash a gas revolution that would lead to improved power generation, full-scale industrialisation and Liquefied Petroleum Gas (cooking gas) penetration at the grassroots.

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