Page 5 - DMEA Week 15 2021

DMEA COMMENTARY DMEA

16 Kingdom Global Trading Okwagbe, Ughelli south Delta 12,000 Hydro-skimming LTE Mar-20 Mar-22 Valid
Petroleum & Gas Nig. L.G.A Plant
Ltd.
17 Resource Petroleum & Ibeno Akwa Ibom 100,000 Conversion Plant ATC Mar-20 Mar-22 Valid
Petrochemicals
International
Incorporated
18 Gazingstock Petroleum Abalagada Community, Delta 5,000 Topping Plant ATC Mar-20 Mar-22 Valid
Company Limited Ndokwa East LGA
19 Amakpe International Ibeno, Eket Akwa Ibom 12,000 Topping Plant ATC June-20 June-22 Valid
Refineries Limited
20 Atlantic International Okpoama, Brass Bayelsa 2,000 Topping Plant ATC Sept-20 Sept - 22 Valid
Refineries and
Petrochemical Limited
21 Azikel Petroleum Obunagha, Yenagoa Bayelsa 12,000 Hydro-skimming ATC Sept-20 Sept-22 Valid
Limited L.G.A Plant
22 Allegiance Energy and Esit Eket Akwa Ibom 55,000 Conversion Plant ATR Oct-20 Oct-22 Valid
Power Limited State
23 Alexis Refinery Limited Aboh, Ndokwa East Delta 2,000 Topping Plant ATC Dec-20 Dec-22 Valid
L.G.A

Key: NA (Not Applicable) means ATC expiration for the company does not apply, because overall work progress is beyond 50% mechanical
completion for the project, in line with Sec III Subsection 3 of the Guidelines for the Establishment of Hydrocarbon Processing Plants
(Petroleum Refinery and Petrochemicals) in Nigeria.

in bringing such projects to fruition, the chances history of unfulfilled promise has given rise to
of such a capacity rise being fully realised are a newfound scrutiny on the downstream sector.
almost zero, however, the progress shown by the
modular units is a shot in the arm for the sec- Permits for products
tor and provides major encouragement for the Given the transformative potential of the Dan-
development and expansion of Nigeria’s down- gote project, the company has a unique opportu-
stream industry. nity to use its influence to bring improvements to
Speaking to Downstream MEA (DMEA), Ian Nigeria’s industry legislation.
Simm, Principal Advisor at consultancy IGM Last month, the company called for a clause
Energy, said: “It might not sound like much, but to be included in the long-awaited Petroleum
achieving construction completion at 23,000 Industry Bill (PIB) that allows only companies
bpd of refining capacity is a major step forward with an active refining licence to import petro-
for Nigeria’s refining sector. The Dangote unit leum products, arguing that this would encour-
is clearly the one everyone is waiting for, but age private investment in refining.
companies like Waltersmith have started the During a presentation to members of the
ball rolling on an approach that set achievable National Assembly’s PIB joint committee, Dan-
targets and brings tangible benefits for the local gote’s chief strategy officer, Aliyu Suleiman rec-
communities.” ommended a backward integration policy be
applied in the downstream sector to encourage
Expired permits investment in local refining.
Following the publication of the valid licences, According to Nigeria’s Punch daily, he said:
media reports suggested that the DPR had “Nigeria is exceptional in being a major oil pro-
revoked 32 permits for private companies to ducer with near-zero refining capacity”, adding
build refineries. This prompted the DPR’s head that while the Dangote unit will help address
of public affairs Paul Osu to make a statement this, there may be shortfalls during maintenance
of clarification: “We wish to clarify that DPR did or amid a growth in demand.
not revoke any refinery licence.” “To support this, licence to import any prod-
He added that those not included in the pub- uct shortfalls should be assigned only to com-
lished list had expired. “Refinery licences, like panies with active refining licences. Import
our other regulatory instruments have validity volume to be allocated between participants
periods for investors to attain certain milestones. based on their respective production in the
This implies that after the validity period for the preceding quarter. Such import will be done
particular milestone, the licence becomes inac- under the [direct sale-direct purchase] scheme,”
tive until the company reapplies for revalidation he suggested.
to migrate to another milestone.” In support of this recommendation, Sulei-
“This does not in any way translate to revoca- man said that imported fuels are generally very
tion of licence of the company,” Osu noted. low quality, noting that imported petroleum
Of those no longer valid, seven were intended products must conform to the 50 ppm sulphur
to be built in Niger Delta, four in Akwa Ibom and Afri-5 standard.
three in each Edo, Lagos and Rivers. However, with 55 private refining licences
With so many refineries having been pro- either valid or recently expired, such a regulation
posed, the DPR’s short two-year window dur- may only serve to add to the number of planned
ing which to begin work is understandable. A plants that never come to fruition.™

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