Opinion: Encouraging local crude oil refining in the Niger Delta

by Akanimo Asuquo Sunday

Crude-oil-theft-in-Nigeria

Government should be innovative and ingenuous in formulating policies that regulate the extractive industries. Home made policies regarding the extracting of our natural resources should be considered against the present practice of copying hook, line and sinker, what obtains in other climes

In the creeks of Brass,Escravos,Ogoniland,Akassa and other riverine communities of the Niger-Delta, small-scale refining of crude oil forms part of the economic ecosystem and is the mainstay of many families. In the past, fishing and cultivation of crops was the main source of their livelihood. The situation has changed. No thanks to the environmental degradation and pollution occasioned by the activities of oil drilling companies.

Illegal refining of crude oil is a booming trade in the creeks of the Niger delta.In recent time,the Joint Task Force (JTF) has destroyed a lot of small scale  artisanal refineries that dot the landscape of the region. Destroying the refineries is a very superficial approach to addressing this problem. They will spring up again and resume production. There is need for government to explore the viability of supporting these local refiners with a view to boosting domestic production and also re- distributing wealth. Local refining of crude oil provides makeshift employment to a lot of youths in this endowed but forsaken region. In one of the camps,it was reported that about 400 people earn their living refining what they call “our natural resource”.

Crude methodologies are employed by these artisans in the process of refining the oil.Thermal cracking is used in breaking crude into useful products. Essentially, the crude to be refined is put into a container and heated to varying degrees. Different products are produced from the crude oil at different temperatures. This process may be inefficient, clumsy and a bit dangerous, but it surely works.

The end product is usually cynically referred to as ‘adulterated product’. An anectode would suffice. Before the white men came,the liquour need of Africans was met by what is referred to in local parlance as Kaikai, Ogogoro, Burukutu etc.These drinks were produced using indigenous distillation processes. When the colonialists came, they outlawed the production and sale of the locally produced liquor and labelled it ‘illicit gin’. True to type,the whiteman introduced his own brew and gave them fanciful monikers such as
Dry Gin, Whiskey, Brandy and Champagne.Expectedly, Africans revelled in the consumption of these foreign drinks and drank themselves to stupor while their brewing craft was dying. We don’t seem to have any regards for pioneering and innovative endeavours. We extol and worship anything foreign irrespective of how injurious its attendant effect will be to our economic well-being.

Recently, a US-based Revenue Watch Institute(RWI) released the Resource Governance index ranking which placed Nigeria 40th among 58 natural resources-rich nations in terms of management of the proceeds generated from their resources to bring about commensurate development of its citizens. Nigeria’s overall score was 42,placing it behind 10 other African countries. No African country was among the first 14 countries in the ranking which is topped by Norway, the US and United Kingdom with 98,92 and 88 scores respectively. The report,which identified mismanagement and corruption as constituting major setback in resource governance in many of the country specifically mentioned Nigeria as having 60 percent of its oil revenue in 2011 alone higher than total international aid to all Sub-saharan Africa. It is glaringly clear that the managers of our natural resources have continually failed in using our natural endowments to improve the lots of Nigerians. The efforts of the aborigines aimed at adding value to their resources should be commended.

Since large scale production from the nation’s refineries still remain a mirage, it behooves on government to review its policies and laws on the refining of crude oil. The proposed Petroleum Industry Bill (PIB) should be re-worked to recognise the operations of these artisans as stakeholders, accommodate their needs and incorporate them into the scheme of things. Few years ago,licences to build new refineries were issued to companies. No functional refinery has been built by the licencees. The so-called ‘illegal refineries’ are at least working. Against this backdrop, it makes sense to wager that had the licenses been issued to these small scale refiners, who would have aggregated to form a common entrepreneurial front, Nigeria would by now be considering putting an end to the importation of refined products. The resultant effect of that gesture would have been employment generation, wealth creation and re-distribution, and of course, a gigantic leap in our Gross Domestic Product(GDP)

Government should be innovative and ingenuous in formulating policies that regulate the extractive industries. Home made policies regarding the extracting of our natural resources should be considered against the present practice of copying hook, line and sinker, what obtains in other climes. Peculiar problems require peculiar solutions. Local refining of crude oil by the aborigines of the Niger Delta should be encouraged. Little wonder that a serving senator Ita Enang (PDP) representing Akwa Ibom north senatorial district, having recognised  the economic relevance of this initiative, advocated for government’s recognition and support of this emerging sub-sector. He also brought to the fore the fact that people from a particular ethnic group own 83% of the nation’s oil wells. Nigerians deserve to have equal access to their God-given resources, albeit,within the ambit of the law. The aborigines of the oil producing areas are the direct sufferers of the negative effects of oil exploration.

However, certain criteria would need to be addressed before their activities can be regularised. For a start,a pilot scheme may be set up in one of the oil- producing states to test the workability and viability of this initiative. Licenses would have to be issued to prospective local refiners on a geographical basis, say three licenses per oil-producing states. Licensed operators will have access to purchase crude from NNPC. This will warrant the artisans to form alliances and mergers with a view to collapsing their structures into viable units.

Standardisation is another key area that would be addressed. Clearly delineated guidelines and Standard Operating Procedures should be put in place to guide their operations by the Department of Petroleum Resources (DPR) and the Nigerian National Petroleum Corporation(NNPC).

The Petroleum Training Institute, Effurun can provide support in terms of offering unique insights based on researches and scholarly contributions. They can offer invaluable support in the planning, implementation and evaluation stages.

Safety standards and best practices should be put in place to guide their operations. Procedures and channels for procuring crude oil from the NNPC platforms should be clearly spelt out. This will curb the present practice where it is being stolen. A legislative framework by way of re-jigging the PIB should also be considered.

A paradigm shift is long overdue in the management of our natural resources. Nigerians must benefit from their God-given resources. These folks have demonstrated that it is not so much of a rocket science to refine petroleum products as we are made to believe. They have added value in an illegal way. They need to be integrated into the mainstream by creating a framework that will support their involvement in the oil business.

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Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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