Over the weekend, former president Olusegun Obasanjo launched the construction of the first private modular refinery in the oil and gas-rich Niger Delta region. This modular refinery is the first to be actualised out of the 22 operational licenses issued by the Buhari administration; a development which signals a new era of private sector financed refineries as opposed to funding the maintenance of inefficient government refineries.

This proposed 12,000-barrels Modular Refinery, which would be known as Azikel Refinery is owned by Azikel Petroleum, a subsidiary of Azikel Group of Companies. Azibapu Eruani, a beneficiary of one of the 22 licenses issued by the federal government and an indigene of Bayelsa, is the Group President of this company. The refinery is to be located at Obunagha community in Gbarain Kingdom of Yenagoa Local Government Area of Bayelsa state. The refinery is sitting on 19.92 hectares and it is expected that Azikel Refinery would come on stream in 2019.

“I join you all in thanking President Buhari for giving four licences more than we gave. And he (Buhari) is lucky that he has a man like Eruani to be the only one to actualize,” Obasanjo said.

Apart from the private modular refineries, the government is also banking on the completion of the Dangote refinery to solve the fuel crisis in the country. Minister of State for Petroleum Resources, Dr Ibe Emmanuel Kachikwu while visiting the Dangote Oil Refinery site, Lekki Free Trade Zone, in Lagos last year said, “It is good to say that private sector is the answer to Nigeria’s problems with a project as big as this. The challenge I will give you today is that of time, I see your time for completion is 2019 December, but I am sure you will understand my desire if I tell you that the refinery component of this project should come earlier than the set date.”

Recent developments suggest the government concedes that it’s been self-sabotaging in respect to its own refineries. The Sunday Telegraph reported some months ago that the federal government had spent more than N264 billion over 16 years for the maintenance of the four refineries. The government through years of poorly managed funds have since resulted in the importation of about 80 percent of the supply need in the country at extremely high costs. This approach is also the reason for the incessant fuel scarcity.

The Dangote refinery, which costs about N144 billion ($400 million), producing 650,000 barrels per day, along with the modular refineries are a timely intervention to tackle the nation’s challenges in the industry. Many of which have driven stakeholders to the conclusion that investments in, and operation of refineries is best left to those capable of handling this on commercial terms. With more private investors set to make use of their operational licenses for the modular refineries, Nigerians can expect an end to the current debacle of fuel scarcity soon.

Vice President Yemi Osinbajo had often spoken about using the privately financed modular refineries to improve local refining capacity. According to his Special Assistant on Media and Publicity, Mr Laolu Akande, the 10 modular refineries were located in five out of the nine states in the Niger Delta region. They are located in Akwa Ibom, Cross River, Delta, Edo and Imo states

Original post by http://venturesafrica.com/weekly-economic-index-nigerias-foreign-reserve-continues-to-rise-oil-price-bounces-back/

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Senior Writer

Bura-Bari Nwilo lives in Port Harcourt, in Nigeria. He is the author of A Tiny Place Called Happiness – a book of stories.

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