Page 6 - DMEA Week 24 2021

DMEA COMMENTARY DMEA

Nigeria talks about legalising illicit

refining in the Niger River Delta

According to an advisor to President Buhari, Abuja wants to

authorise and regulate small-scale oil-processing operations.

AFRICA OIL development has been a source of revenue The complaints about sabotage and damage
and influence in Nigeria, but it has also been a to pipelines have been echoed by international
source of tension. oil companies (IOCs) working in Nigeria. This
WHAT: Many of the country’s onshore oilfields are is not surprising, given that these incidents affect
Senator Eta Enang located in the Niger River Delta, within regions them directly, causing them to lose both crude
says the government is where distrust of the federal government runs and money. The country typically loses about
drawing up plans for strong. Communities within the delta have 400,000 barrels per day (bpd) of oil in this man-
“artisanal refineries” in repeatedly alleged that Abuja deprives the ner, according to industry analysts. At current
the delta region. region of its fair share of oil revenue and ignores prices, this amounts to about $29.6mn per day.
the extensive damage that oil companies have The Nigerian government has been trying to
WHY: inflicted on the local environment. They have resolve this long-standing problem by devoting
His remarks follow the also raised questions about whether officials in a larger share of federal revenue to investments
signing of an agreement the capital are more concerned about interna- in communities near the delta oilfields. It has
on a project designed tional oil companies (IOCs) than about their also launched training and educational initia-
to curb black-market own constituents. tives and has tried to come to terms with local
refining. In return, Nigerian authorities have accused militant groups. In 2000, it established a gov-
communities within the delta of fomenting eth- ernment department known as the Niger Delta
WHAT NEXT: nic strife and civil unrest. They have also com- Development Commission (NDDC) to pro-
The Brass Petroleum plained about the local practice of damaging mote economic growth in the region. (Buhari
Products Terminal and sabotaging oil pipelines and infrastructure, dissolved NDDC’s board in 2019 and has not
could be linked to small sometimes in a bid to protest development and yet appointed replacement members, but Min-
refineries, but the sometimes in order to steal crude for processing ister of Niger Delta Affairs Godswill Akpabio
Nigerian government will and sale on the black market. Additionally, they recently promised to rectify this situation in the
have to clarify its policy. have pointed out that these incidents discourage near future.)
IOCs from investing in Nigeria, reduce oil rev-
enues and exacerbate domestic fuel shortages, Small-scale refining strategy
since crude diverted to underground refineries And now, it also plans to experiment with legal-
is often made into petroleum products and then isation of some of the activities that have bedev-
sold at below-market prices in neighbouring iled IOCs working in the region. According to
countries. Eta Enang, a Nigerian senator who serves as

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