N/Delta Indigenes Give Terms for Modular Refineries’ Takeoff

. Want 100% funding of projects by govt
. Seek 50% investment of 13% derivation funds in schemes
. They’re alternatives to illegal refining, says govt

The proposed investments in community-based modular refinery projects across oil-bearing states of the Niger Delta will become a pipedream unless government reviews its model to accommodate divergent interests among youths in the region, according to stakeholders of the region.

Apart from the sudden reawakening of the old debate — on whether it is the beneficiary states or their oil-bearing communities that should manage the extant 13 per cent derivation fund — elders and youths in the area yesterday expressed misgivings about a refinery programme that lacks active indigenous participation and government’s readiness for 100 per cent funding.

But the presidency yesterday said the community-based refinery project is a genuine effort to provide alternative to illegal refining in the Niger Delta. Mr. Laolu Akande, the spokesman of the Acting President, said Minster of State for Petroleum Resources, Mr. Ibe Kachikwu, already has details of the programme. He said government would continue to engage oil communities to resolve all issues in executing the projects. According to Akande, the community-based modular refinery programme has always been discussed at the ministerial committee level. “The project will be private-sector driven ,” he assured.

Divergent opinions coming from elders and youths, from a region government expects to host the all-important projects, portend continued unrest, militancy, economic sabotage and environmental hazards caused by illegal refining by impoverished youths. “Indeed, there is the absolute need to ensure that host communities in the Niger Delta buy into the project and that they do this as a collective responsibility,” says Moritz Abazie, who runs Strides Energy and Maritime Ltd, a Port Harcourt-based oil and gas services firm.
“Any thing short of a collective agreement on the way forward will render the community-based modular refinery programme of government a pipedream and worsen our economic woes, ” he said.

Mr. Francis Ewherido, an Urhobo indigene of the Niger Delta who runs the Titan Insurance Brokers, agrees that the project could change the fortunes of the region but warns against hijack by a ew individuals. “The equity arrangement should be such that will benefit the majority of the people,” he said.

A modular refinery is made up of smaller and mobile parts that are more easily fabricated and more quickly transported to site. They come in different sizes with varying capacities normally lower than conventional refineries.

The official plan was evolved to curb the menace of dangerous and unauthorised artisanal refining after Acting President Yemi Osinbajo toured the restive Niger Delta communities on the behest of President Muhammadu Buhari. Sequel to that visit, the Buhari administration approved that new licences be issued for community-modular refineries to keep the ‘illegal’ activities of artisanal refiners in check. The arrangement allows a 40-per cent equity for oil-bearing communities while the Federal Government augments the effort through a 60-percent investment through its agencies, including the Nigeria Sovereign Investment Authority (NSIA), among others.

Even as elders and youths from the region yesterday re-iterated their support for the programme they told The Guardian that they were not willing to play a less than important role in the project and should therefore be allowed to determine 100 per cent of the investments.

Opinions on this differ: Dr. Wellington Okirika, the first executive chairman of Delta State Oil Producing Areas Development Commission (DESOPADEC) said the programme should provide ample opportunity for government to engage repentant militants trained abroad on oil and gas-related operations, an opinion reechoed by Comrade Sheriff Mulabe, who chairs the Kokodiagbene Community in Gbaramatu Kingdom, Warri, Delta State.
Wellington suggests that government, in executing the modular refinery projects, should borrow a leaf from previous efforts that were aborted by government’s failure to create the requisite incentives for investors. He said DESOPADEC under his leadership many years ago keyed into a Federal Government (modular refinery) programme in trying to industrialise the degraded environment of the oil communities for which the officials had reasons to visit Ventech Engineering, the world’s number one manufacturer of modular refinery components in the United States, among others. While admitting that the current conditions set by government are friendly to investors, he explained that the exorbitant licence and other guidelines at the time scared them away.

Wellington also noted that it would be difficult for communities to provide the 40 per cent equity needed to participate in the projects and suggested that half of the proceeds from the 13 per cent derivation fund allocated to states should be reserved for oil-bearing communities to attain the requirement. “How can oil communities in Niger Delta get 40 per cent of $250 million needed to set up a 20,000 barrels-per-day modular refinery?” he queried. “The 13 percent derivation fund is under the Exclusive Legislative List, and all that President Buhari needs to do is to issue another presidential directive that 40 per cent of the fund be paid to communities as contribution for the refinery project,” Wellington concluded.

But Austin Ojameruaye, president of the Uhrobo Progressive Union (UPU), Youth Wing in Lagos, thinks the Federal Government should address the 40 per cent equity option by taking what he referred to as “the Eleme Petrochemical Company option” by providing 100 per cent of the funding and allowing the communities net out the loans over the years during profit sharing.

Ijaw youths also expressed support for the project but noted that government should ensure that the target beneficiary should not be left out in the process of executing it. “Since the modular refinery idea is targeted at special people, efforts must be made to identify them and key them in,” Mr. Eric Omare, the president-general of the Ijaw Youth Council (IYC), told The Guardian on Tuesday.

He said policy hijack by politicians marred similar projects in the past. “There has been policy hijack in recent years; we do not want politicians to hijack the modular refinery project. Secondly, instead of looking for investors, government should allow the locals to get the investors. The Gbaramatu people, for instance, had done this without the Federal Government’s intervention. Government should be interested in regulation only. The percentage of equity should be determined by the communities, not the Federal Government.”
Omare’s position was re-emphasised by Mulabe, the chairman of the Gbaramatu Kingdom and Johnson Biboye, who commands the Iduwini Volunteer Force (IVF).
Biboye believes that government has not succeeded with its Amnesty Programme and that a similar tendency could truncate the proposed modular refinery projects for Niger Delta communities.

“Out of my 350 boys, only three were carried along by the Amnesty Office. They need to reach out to all the boys – not the elders,” he said. “The problem is with the youths. The elders are only benefitting themselves and their families. Government should come down to the youths.”

Mulabe said the refinery project has once availed government of an opportunity to effectively engage ex-militants who were trained abroad. “It will also create an opportunity for local refiners who government (wrongly) calls illegal refiners. Let this not be political modular refinery project but genuine project by government,’ Mulabe said.

“We are aware that over 30 licences were issued to various investors in 2011 and they will expire in June (next month). Any licence issued without the support of the community is political because it is the community that will provide land for the projects. Again, the modular refineries must be sited close to the source of crude.”

The Guardian