Amnesty Office, Others Warn As Nigeria Loses $2 Billion To Illegal Refineries

The Presidential Amnesty Programme has raised the alarm over the activities of illegal crude oil refineries in the Niger-Delta region, describing it as a dangerous trend.

According to the organisation, the domestic refining of crude oil by artisans in host communities had grave health and environmental implications for the country.

The Federal Government had also said that Nigeria lost 53 million barrels of oil worth over $2 billion in the past due to informal crude oil refineries.

The national coordinator of PAP, Colonel Millard Dikio (retd.), issued the warning during the 2nd edition of the stakeholders’ engagement on the integration of modular/artisanal refinery operations in the oil and gas sector in Abuja.

The event was organized by the Office of the Senior Special Assistant to the President on Niger-Delta Affairs with the theme: “Current challenges of revenue loss, petroleum product scarcity, environmental pollution and negotiated way-out.”

Dikio also encouraged all stakeholders to set aside their differences and support efforts to save not only the environment, but also the country’s economy.

He warned that, “things can get worse” in Nigeria, if urgent and systematic steps were not taken to contain the effects of informal crude oil refining.

The PAP Coordinator said, “We cannot seek to make money by all means. We cannot destroy our environment, because we want to make it.”

“There are problems with artisanal refining. These activities have serious health and environmental implications, but what is the way forward? We all need to put our heads and hands together to so solve these problems.”

The Executive Secretary, Nigerian Extractive Industries Transparency Initiative, Dr. Orji Ogbonnaya Orji, sais that Nigeria lost about $2 billion worth of crude oil in the recent past due to the activities of informal modular refinery operators.

He however, said Nigeria’s challenges in that regard were surmountable through policy measures that would fully integrate them into the mainstream oil and gas industry.

Orji said, “Harmonizing and backing modular refineries with policy will reduce or eliminate pipeline vandalism, check oil theft, and save the nation from revenue loss.”

“From our recent independent report in the oil and gas sector, Nigeria lost 53 million barrels worth over $2 billion in revenue losses, and this is about 674 million barrels that were produced in that year.”

“During the same period over three million liters were spilled in over 370 locations within the host communities with attendant complex consequences for the economy.”

Orji said that the NEITI would support any measure to stop crude oil theft and losses as well as liberalize the industry to create more jobs for our youths.

The Minister of State for Budget and National Planning, Clem Agba, said ongoing efforts to ensure that artisanal crude oil refiners were absorbed into the formal sector would get the backing of the Federal Government because of the multiplier effects on the nation’s revenue base.

Agba said, “Any attempt at formalizing the informal sector would be supported. Why? It would enhance revenue to the government. A lot of studies have shown that the informal sector ranges between 60-70 percent of the Nigerian economy. That’s very significant, but they are not registered, regulated or paying taxes.”

“So, the government and even the citizens are losing, because there’s no standard procedure for operation. That’s why we consider it very imperative.”

“We will continue to support any programme of action or structure that would help the transition from informal to formal organisations, because we will all benefit from it.”

The Senior Special Assistant to the President on Niger-Delta Affairs, Senator Ita Enang, said that the government had lost so much money to oil thieves, stressing that it was high time the country regularized modular refinery operators to save the economy.

He also said that the Russia-Ukraine war had created opportunities for the nation’s energy sector, hence the need for all players to be brought on board in order for Nigeria to take full advantage of the rising global demand for oil.

Enang said, “as of today, it is alleged that due to the war between Russia and Ukraine, the potential of the world refiners to meet demand of the global community and nations have to look inward for energy sufficiency.”

“Today, the world is facing an energy crisis, and all the nations are now looking into internal sources of solving their problem part of which is the domestic refinery which we call artisanal refining. It is time for us to regularize it for the purpose of saving the economy. We are here to find a way to resuscitate the nation, our future and the economy of this country.”

Other speakers at the event included the Vice Chancellor of the Federal University of Petroleum Resources, Effurun, Delta State, Professor Akpofure Rim-Rukeh; the Executive Director of Youth and Environmental Advocacy Centre, Fyneface Dumnamene Fyneface, amongst others.

He advised the Federal Government to scale-up the local technology of informal crude oil refineries, train and integrate the operators into the mainstream.

According to him, this would be a sustainable response to the disruptions caused by the activities.

Rim-Rukeh said, “Oil production dropped drastically as our youths who try to eke a living by going into the conversion of crude oil which they obtained from our pipelines into a usable diesel. They deploy local technology to make this work.”

“FUPRE has tested the product and found that it is actually in line in terms of specificity with other imported oil products in this country.

“What is the way forward? We are working to see how we can develop an indigenous modular refinery, because what we are seeing has to do with a reduction in the loss of crude oil which affects the nation’s economy, and how to improve the environment.

“My proposition today, therefore, is to scale up the activities and technology of what these youths are deploying in the Niger-Delta. Government has to take inventory of these artisanal, and domestic refiners and train them on the technology to improve the process in an eco-friendly manner. Then, they can now form a cooperative society as a group, and obtain a license to legally request for crude oil from the Department of Petroleum Resources.

“Let us take a decision here today to save our environment and improve our own lot and the economy of Nigeria. Any decision we take today, by the grace of God will help us”,

Fyneface called on the security and paramilitary agencies to do more to checkmate illegal bunkering of petroleum products out of Nigeria.

“Due to so much money in the hands of non-state actors, it contributes to the proliferation of small arms and light weapons including AK-47 which they use to protect themselves in the illegal business, and when opportunity comes, they also maximize those weapons to cause insecurity, kidnapping, piracy, and armed robbery.

“These are some of the issues we have and I think the onus lies on the security operatives who are representing the Federal Government to work with the various stakeholders to see how they can address this issue,” he added.