Former Minister of Interior and chairman of Integrated Oil & Gas Limited, Captain Emmanuel Iheanacho has assured that his company’s 20,000 Barrels Per Day (BPD) capacity refinery is on course and will be delivered in 15 to 18 months from day one of construction activities.
He said having secured approval licence five months ago; efforts are currently on in perfecting construction site takeoff logistics.
Answering questions on the current fuel shortage being experienced nationwide, he was quick to argue that “It is really a question of supply and demand,” and that “There is a lot of demand, as we have lots of vehicles requiring fuel”.
According to him, “We need adequate supply, which has to be backed up with availability of foreign currency. It isn’t anybody’s fault that oil price went down at a critical point, to the extent that foreign currency became short in supply. These are part of the problems we are trying to cope with.
“ I think those in charge of policy making in the oil sector are doing their best in the short term to ensure adequate supply in the market. But on a long-term basis, the measure, which we ought to consider, is building more refineries so that we can refine our own crude.
On the readiness of his group’s refinery, Iheanacho explained that “We intend to build a 20,000 Barrels Per Day (BPD) modular refinery and our plan is that once we have the authority to construct, we should be able to have the refinery up and running within 18 months”.
“If that is the case, then all the things I said about adding possible value to the trade and cutting of extraneous cost we currently spend on the transportation of the oil to foreign refineries will no longer happen. So, we will be able to produce the oil sufficiently cheap and the net beneficiaries will be Nigerians.
He said why the individuals issued licences years ago to operate private refineries have been unable to do anything since was because the complexity and precarious nature of the technology involved remain ever changing.
He warned that people should not trivialise what building a refinery entails, saying “It is not an easy business and it is technologically complex”.
“Such issues as land or location of the refinery are very important considerations, when thinking of building a refinery. A refinery has to be built where it can be easily accessed by tankers that will bring crude oil, as well the vessels that will take out the refined products. The technology is also a complex one.
“It is not every Tom, Dick and Harry that can build a refinery. There are so many issues to be considered. For instance, there is environmental consideration, where you ensure that the environment is not harmed in the process of establishing the refinery.
“All of these things put people off. Refineries are very expensive facilities to build. Take for instance the 20,000BPD refinery. This is an investment of about $250m, which isn’t easy money. Continuing, he said “When all these factors are taken into account— the technical requirement, capital, location and acquiring adequate land among others, you know it can only take certain people to go into the building of refineries. A lot of enthusiastic people that venture into the business initially drop out along the line, when they discover what is required. But we will work very hard to achieve what we set out to do. The project would be seen to a successful completion. We’ve gone quite far, having articulated the feasibility proposal, and made a presentation to DPR concerning our business philosophy; what is driving us, where we are going and how we’ll get there.
“If you pass that stage and the DPR is satisfied, then they issue you a licence to establish a refinery, which is what we have done. We got the licence five months ago and we have moved on from that point to do other necessary things. We are moving on to the next level, where we are authorised to construct. Once we get there, all we then need is the money. If the commitment is in place, we will definitely start building a refinery.
“We are very hopeful because we have met nothing that tells us we cannot do it, and in a few more months, we will invite important players in both maritime and oil industries to come and witness the turning of the sod and by the grace of God, in 15 or 18 months from that day, we will invite you again to come and see us launching the refinery, and you will see it working.
In his submission, Iheanacho said Crude allocation from the NNPC will not be a big issue as Nigeria remains a major oil-trading nation, and we produce crude, which we sell to third parties. “NNPC and the Federal ministry of petroleum resources maintain incentives, which they give to Nigerians going into the business of operating refineries. They actually guarantee you a certain proportion of the feed; so we hope that we will benefit from that and we don’t think there is any problem there. We are not pessimistic.