The Minister of State for Petroleum Resources, Chief Timipre Sylva, said the government would support artisanal refiners who are lawful in their operations.
The minister revealed this in Abuja on Sunday when he attended a Nigeria News Agency (NAN) forum.
He said the government has supported the construction of modular refineries to help boost local production and also reduce the impact of oil exploration on the environment.
He said the illegal operations of artisanal refiners made it impossible for the government to support such businesses.
“See, when they talk about artisanal refineries, well, I have my position on that. I love that people try to make a living in a certain way; but earning a living must be legal.
“When you compare artisanal crude oil refiners to artisanal gold refiners, people have to understand the distinct difference, I have no problem with you being an artisanal crude producer.
“People who are artisanal gold producers, go digging, any little amount they get, they sell. So if you too want to go dig your own crude oil, that’s okay. Use your shovel, whatever you want, mine your own crude oil and sell.
“Craftsmen can sell their own crude oil in bottles or buckets as long as you produce crude oil.
“These are the artisanal crude oil producers that I will recognize.
“But if you are artisanal refiners and you steal what someone else has dug out of the ground and you steal to refine, then you are not fair,” the minister said.
According to him, if the artisanal gold producer steals the gold because the gold is produced in his area, then you are a criminal.
The minister said that an essential difference between the two products is that in the case of gold, they will dig it up and produce it themselves, so they can sell it and make money.
“Crude oil, the problem we have is crude oil, people don’t produce it, they’re going to steal what other people have produced. So they cannot be considered an artisanal producer, ” he added.
He said the government had awarded marginal field licensing programs involving Nigerians and urged artisanal refiners to join the program.
“He further urged artisanal refiners to reach out to people who have modular refineries to operate.
“There are so many ways that people can participate, but not to go and steal what someone else has invested money to produce and then you say you are an artisanal refiner,” he said. he noted.
Sylva said the oil trade has a lot to do with economies of scale in production.
“For example, if you print, if you print more, you have reduced your costs, but if you print less, your unit cost goes up, so it is in the petroleum industry.
“If you produce little, the cost of production is higher than if you produce more. If you refine more, your production cost will become lower than when you refine less.
“So the point is if you have these small refiners their cost will not be easily controllable and secondly it will be a major regulatory nightmare,” he added.
He said currently the environment has been negatively affected with the few operators in the Niger Delta, adding that allowing more refiners that produce less quantity would cause more damage.
“Now let’s say we have a thousand modular refineries or let’s just say 100 refineries producing 1000 barrels per day.
“They are a good size modular refinery. The artisanal, we do not even talk up to 1000 barrels. It would be even more, but I only use this 1000 barrel standard.
“If you have about 1,000 barrel refineries, including about 100 in the Niger Delta, these types of refineries cannot be far from the source of the raw materials because it is better for them to have easy access to the raw materials. .
“If you have 100 refineries, you can imagine what it will be. Everywhere, a refinery will go up.
“And now you have 100 refineries and that will give you 100,000 barrels of refined product by 100 refineries against a refinery which will also give you 100,000 barrels of a refinery. Which refinery will perform better?
“The 100,000 barrels, so frankly, yes, it’s good for us to have modular refineries, I agree, and I’m promoting that.
“But when you take it below the modular refineries, and let’s say artisanal refineries, we’re now going to have about 500, 200, 100 refineries,” he said.
This, he said, would be harmful to the environment.
He noted that the government has a modular refinery program that provides loans to help people build modular refineries.
“We understand the need for a modular refinery, at least to complement the larger refineries, but you know, when you proliferate at the 500, 200, 100 barrels per day level, then you don’t wish us luck in the delta. from Niger, ” he said. (NAN)
