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FG abolishes US$1 million refinery performance deposit

By Yemie Adeoye
IN an effort to encourage private sector participation in crude oil refining the Federal Government acting through the Department of Petroleum Resources has announced the immediate removal of the statutory refinery commitment deposit of 1 million US dollars.

President Yar Adau
President Yar Adau

This was contained in a statement issued and signed  by the Public Affairs department of the DPR and made available to Vanguard in Lagos during the week.

It reads in part “The Department of Petroleum Resources wishes to inform the public that the Honourable Minister of Petroleum Resources has approved the elimination of the payment of the statutory refinery commitment deposit of  US$1Million for every 10.000 BPSD refining capacity as contained in section 11 sub_section 2.1.1(iv) and section 111 sub_section 3.4.2 (iv) of the Guidelines for the establishment of Hydrocarbon Processing Plant (Refinery and Petrochemicals) in Nigeria”.

It further states that “The Department of Petroleum Resources wishes to state that this is part of Government’s strategy to encourage private sector participation in crude oil refining and also its desire to locally refine 50% or more of Nigeria’s crude oil.”
Meanwhile, all other conditions laid down in the 2007 Guidelines for establishment of private refineries appears to remain applicable until review as no mention of these areas was made in the statement.

It may be recalled that as part of Government’s effort to streamline and reposition the operations of private refineries, the US$1Million deposit payment was one of the conditions to be met by prospective investors.

The deposit was to be refunded with accruable interest after the investor had attained a set milestone during construction period.
The Department of Petroleum Resources wishes to assure investors both local and foreign that Government will continue to partner with genuine investors to meet its aspirations for the oil and gas industry.

In a related development the NNPC said in Abuja during the week that its products pipelines vandalized in the Chanomi Creeks in Delta, would be ready for use early in October.

The pipeline network, which supplies crude to both Warri Refining and Petrochemical Company Ltd (WRPC) and Kaduna Refining and Petrochemical Company Ltd (KRPC), was attacked by Niger Delta militants three months ago.

Dr Levi Ajuonuma, the Group General Manager (Group Public Affairs Division) of NNPC, told newsmen that repair work had since begun on the damaged sections of the pipeline.

“The repairs would be completed within the first week of October. Thereafter, there would be a trial test of the pipelines for one week before we start pumping products again to the refineries.

“Our technical personnel are working hard to re_stream the network, taking advantage of the relative peace situation in Niger Delta as a result of the amnesty granted to the militants, who are responding positively to that gesture,” Ajuonuma said. The official said that normal crude supplies to the refineries would commence after the repairs so that more petroleum products, especially kerosene, would be available to the people.


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