FG to revoke unutilized private refineries licenses

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu

By Ese Awhotu with agency report

The Federal Government has said it would revoke unutilized licenses given to individuals and corporate organisations for private refineries in the country.
The Minister of State for Petroleum Resources, Ibe Kachikwu, disclosed the plan of the Federal Government at a World Press Conference on the sidelines of ongoing annual Offshore Technology Conference in Houston, U.S.
Recall that the Federal Government under former President Olusegun Obasanjo had granted licenses to some private concerns to build refineries; but only businessman Aliko Dangote put it to use.
His refinery is nearing completion, and recently, he assured that the 1.3 million metric tonnes per annum petrochemical plant in Lagos would commence operation in the last quarter of 2018.
The News Agency of Nigeria, NAN, reports that Kachikwu said that he had had discussions with the Department of Petroleum Resources (DPR), whose statutory functions included processing application for various licenses, permits and approvals across the oil and gas value chain, on the matter.
"I have spoken with DPR on the matter. Those who have not been able to move forward will have their licenses withdrawn," he said.
He said that the aim of giving licenses was to reduce the huge capital flight to fuel importation, meet local demand and look at possible exports.
The minister explained that the review of the system was necessary as the nation's existing refineries, which had a combined capacity of 446,000 barrels per day (bpd), were grossly inadequate to meet national daily demand.
He said that his outlook for the year for the sector was to "have a robust relation with investors to increase production of crude to 2.5 million bpd and then to 3 million bpd".
On incentives for modular refineries, he said "indeed we have incentives for them.
"Since they will be located in states, land will be provided and the modular refineries will be peopled around private sector, especially independent producers who already have the crude".
On the Malabu $1.3 billion scandal involving officials in Nigeria and internationally, Kachikwu said the case was a worrisome issue, but was still in court.
He explained that investors would leave other countries to do business in Nigeria irrespective of seeming unstable business climate, because "Nigeria has the best returns on any investments in the World. The terrain is good''.
"A lot of latitude is given to investors to develop what works for them. Most of them know how to be resilient because they know the returns.
"Our resource base is huge. We have huge gas reserves, huge downstream opportunities.
"I don't know of any country that has that much resource, that income generation. I think we can favourably compete with Saudi Arabia".
According to NAN, Kachikwu said that, when he took over at the ministry there were security issues and downstream policies were not robust as well as lack of investments in the upstream and Nigeria's relationship with OPEC was strained.

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