In a bid to reduce dependence on imported refined petroleum products and cut down on subsidy for them, the Federal Government has granted licences to 65 Nigerian companies to construct modular refineries.
The companies were selected from about 285 applications that were screened for the purpose and it marked a departure from previous experiences when local refineries were destroyed.
Modular refineries are mini-refineries with capacities ranging from 1,000 to 10,000 barrels per day, bpd, which can be assembled and separated easily for enhanced performance and efficiency.
Although the Department of Petroleum Resources, DPR, the industry regulator, feigned ignorance of the development, one of the beneficiary companies confirmed to that the measure is also meant to cushion the impact of crashing oil prices at the international market.
The decision to award Licence to Establish, LTE, which was taken within 10 days of his assuming office in June, may not be unconnected with his desire to see the increase in domestic refining capacity to meet local demand, thereby reducing huge import bills for subsidy.
The shock is not only in the period the approvals were given, but also in the numbers granted considering the fact that 18 LTEs were granted in 2002, but only one of them had come on stream with just 1,000 barrels per day, bpd, capacity.
The refinery is operated by Niger Delta Petroleum Resources, NDPR, which produces only automotive gas oil, AGO, popularly called diesel.
Chief Executive officer of the beneficiary company, who spoke in confidence, said the number was not unilateral, but “the mop up of all applications for private refining since 2007.”
He admitted that the process took a period of six months, dating back to former President, Goodluck Jonathan’s administration, adding, “The process was rigorous as they looked at many issues including, land, investment, technical competence, design and a host of many others.”
He added that licences were offered for a two-year tenure, after which it will elapse, and, “the beauty of these awards is that there was no lobbying, as the whole exercise followed due process.”
In his opinion, there is nothing wrong with the high number of awardees, arguing that “for a country like Nigeria, the more in-country capacity, the better for us, because in a falling oil price regime, the more you refine, the more value you add and the more revenue you earn from your crude.”


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