BEVERLY HILLS, May 3, (THEWILL) – The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Wednesday disclosed that the federal government would revoke licenses given to individuals and corporate organisations for private refineries, which were yet to be utilised.
Speaking at a World Press Conference on the sidelines of ongoing annual Offshore Technology Conference in Houston, US, he revealed having 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.
THEWILL recalls that the Obasanjo administration had granted licenses to some private concerns to build refineries, but only Aliko Dangote, put it to use. The construction of his refinery is nearing completion, and recently, the industrialist assured that the 1.3 million metric tonnes per annum petrochemical plant in Lagos would commence operation in the last quarter of 2018.
According to the minister, “I have spoken with DPR on the matter. Those who have not been able to move forward will have their licenses withdrawn.”
He explained that the aim of giving licenses was to reduce the huge capital flight to fuel importation, meet local demand and look at possible exports.
Kachikwu 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.
Kachikwu 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”.
Speaking 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 one billion dollars scandal involving officials in Nigeria and some other countries, 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”.
The minister stated further, “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”.
He 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.
“When we came in, we worked at recreating 18-20 business units within the NNPC.
“We publish monthly reports, contracts/bids are open, cash call arrears are being dealt with as we have paid the first tranche of 400 million dollars to the International Oil Companies,” Kachikwu said.
Source: The Nigerian Voice (local news)