Page 4 - DMEA Week 35 2021

DMEA COMMENTARY DMEA

Another busy week for

Nigerian downstream

The DPR has provided its latest update on active refining permits as Aliko Dangote
offers details on the government’s high-profile acquisition of a stake in his new facility.

AFRICA NIGERIA’S Department of Petroleum Free Trade Zone, which is working to an end-
Resources (DPR) has updated its list of private 2021 completion under its ATC.
licensed refineries, showing that more than half 35 of the units on the latest list have been
WHAT: of the projects approved have active licences. awarded an LTE, though only 10 of these are
The DPR’s list showed Meanwhile, Aliko Dangote shared details of the active, with the remaining 25 having expired.
that 30 out of 70 refining state’s deal to acquire a minority shareholding in Two facilities have been issued with an LTO:
permits issued remained his new refinery and his company provided an the 5,000 bpd modular unit developed by Wal-
active in July. update on its integrated petrochemicals facility. tersmith Petroman at Ibigwe and Niger Delta
The latest information flows are indicative of Petroleum Resources’ (NDPR) expanded 6,000
WHY: efforts to improve transparency; however, incon- bpd topping plant in Ogbele.
This means that two sistencies and the irregularity of updates has The Waltersmith facility came into operation
permits had expired proved more than sufficient to create confusion. in November 2020, while the construction has
since the previous been completed on the NDPR unit and it has
updates, with another one Permit update been referred for oversight by Downstream
understood to have ended The list updates a document published by DPR Monitoring and Regulation (DMR).
during July. in April which showed that in March 23 refiner- The Azikel Hydroskimming Modular Refin-
ies had valid permits, leading to media reports ery is expected to come into operation later this
WHAT NEXT: suggesting that 32 licences had been revoked. year in Bayelsa State with a throughput process-
NNPC will pay for This prompted the DPR’s head of public affairs, ing capacity of 12,000 bpd.
its $2.7bn purchase Paul Osu, to make a statement of clarification: The DPR document showed that permits
of a 20% stake in “We wish to clarify that DPR did not revoke any for the 100,000 bpd Niger Delta Petroleum
Dangote Refinery with refinery licence.” Resources and Petrochemical Ltd at Escravos,
a combination of cash, He added that those not included in the pub- the 100,000 bpd Jil-Amber Consortium conver-
crude and profits. lished list had expired. “Refinery licences, like sion plant at the Port Harcourt Refining complex
our other regulatory instruments, have validity in Rivers State and the 10,000 bpd RG Shinjin
periods for investors to attain certain milestones. Petrochemicals Ltd unit in Koko, Delta State are
This implies that after the validity period for the all inactive.
particular milestone, the licence becomes inac- Meanwhile, the ATC for the 20,000 bpd
tive until the company reapplies for revalidation Conodit Refinery Nigeria Ltd unit in Delta State
to migrate to another milestone.” expired in July, with the ATC for the 10,000 bpd
“This does not in any way translate to revoca- Duport Midstream facility in Edo State expiring
tion of licence of the company,” Osu noted. this month.
Much of the confusion appears to have At time of publication, the DPR had not
stemmed from reference to the permits being responded to a request by NewsBase to obtain
‘active’ or ‘valid’. the latest list in full.
In a document given to local media outlet The Of the total proposed capacity of 3.51mn bpd,
Nation, the DPR outlined 70 projects with a total projects with a combined total of 1.49mn bpd
proposed refining capacity of 3.51mn barrels per hold active permits, with the Dangote Refinery
day (bpd), but with just 30 of these holding active accounting for almost 44% of that figure.
licences as of July, the April figure of 32 expired When asked about the likelihood of these
permits has now risen to 40. projects coming to fruition, Ian Simm, Principal
The DPR awards four types of permits for Advisor at UK-based consultancy IGM Energy,
private refineries; a two-year licence to establish told NewsBase: “By setting a two-year deadline
(LTE), approval to construct (ATC), approval to to make tangible progress, the DPR has created
relocate (ATR) and licence to operate (LTO). a transparent system that allows ambitious com-
Of the 23 permits that were valid in March, 16 panies the opportunity to set up refineries while
related to facilities with a capacity of 12,000 bpd relatively quickly excluding those that fail to
or less, with the outlier being the 650,000 bpd make the grade.”
Dangote Refinery under construction in Lekki “It does, however, allow for the

P4 www. NEWSBASE .com Week 35 02•September•2021