Modular refineries: FG woos investors with tax waivers, contributory finance

The Federal Government has assured investors seeking to build modular refineries in the Niger Delta region of tax waivers and contributory finance.

Dr Ibe Kachikwu
Minister of State for Petroleum Resources

Mr Rabiu Suleiman, the Senior Technical Adviser to the Minister of State for Petroleum Resources, made this known at the ongoing Nigeria International Petroleum Summit (NIPS) in Abuja on Wednesday.

Suleiman, who spoke during one of the sessions on “Petroleum Products Supply and Demand in Africa – Translating Crude Abundance to Product Abundance’’ assured that government would guarantee regular crude oil supply to interested investors.

According to him, talks are ongoing with potential financiers like the Central Bank of Nigeria (CBN), International Finance Corporation (IFC) and Nigerian Sovereign Investment Authority (NSIA) to provide needed funds to investors.

“Nobody wants to invest heavy amount of money in places where you are not very sure of doing the business without being interfered with in one way or the other.

“Modular refining is a small ticket business and it has very long impacts.

“We have a lot of programmes that will support modular refining initiative, and a lot of incentives have been put together to support this initiatives right from customs duty waivers.

“Anybody who wants to invest in modular refining in the Niger Delta is going to benefit from such custom duty waivers and tax reliefs that are being discussed at very senior level.

“We have reached a very serious level and that is going to happen,’’ Suleiman said.

He said the Federal Government had in Nov. 2017, disclosed that it was considering granting 13 operational licenses for modular refineries in the Niger Delta.

“On financing, we have engaged the CBN, the Bank of Industry (BoI), Sovereign Wealth Fund, Infrastructure Bank including the IFC and the rest.

“We have all worked with them and they all promised to make contributory finance toward that.

“Only two weeks ago, we engaged with NDDC, its Managing Director made a commitment that NDDC was going to see how it could put in some money even if it meant to pick up equity either in one or two or three of the refineries.

“State governments have said they want to be part of it, so we are encouraging a lot of financing.

“In the next two weeks, we intend to call for an investors’ engagement forum that will address some of the funding arrangements that we intend to bring on board.

“Crude is guaranteed more or less. The crude is for sale, we take it offshore to sell, there is no justification why crude should not be made available to the refiners in-country.’’

Also speaking, Mr Babajide Soyode, a Technical Consultant to Dangote Group said claims by NNPC that it was experiencing an under-recovery in its importation and sale of petrol in the country was comical.

Soyode questioned the continued regulation of NNPC downstream petroleum sector, saying under-recovery was synonymous with subsidy.

He further questioned the 445,000 barrels per day (bpd) collective nameplate production capacities of NNPC’s four refineries in the country.

Soyode said: “the 15,000 bpd of Warri, 10,000 bpd of Kaduna, and 65,000 bpd of Port Harcourt are not available as such, it would be wrong to continue to state that the refineries collectively have a processing capacity of 445,000bpd.’’

The conference continues tomorrow. (NAN)

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