Nigeria’s Bank of Industry has signed a MoU with China’s Export-Import bank (CEXIM) for the construction of modular refineries, and programs that will reduce Nigeria’s gas flaring. CEXIM will provide a line of credit worth $500 million to Nigeria to complete these projects. The MoU will also be used by existing modular refinery operators and investors in the country to purchase equipment and spare parts from China.
Nigeria’s Bank of Industry Managing Director/ Chief Executive, Olukayode Pitan while speaking to Guardian Nigeria, said the new joint venture would provide jobs for many young Nigerians.
“This agreement is set to create over 100,000 jobs in Nigeria’s Oil & Gas sector – a decisive move that will advance the Federal Government’s Modular Refineries and Flare Gas Recovery Programme,” he said.
The Federal Government’s Modular Refineries and Flare Gas Recovery Program was introduced by the present administration of Nigeria to solve the country’s Niger Delta crises, where most of the country’s petroleum come from. Thanks to secessionist militants in the area, the illegal bunkering of oil have been a debilitating factor in refining crude in Nigeria. Many illegal modular refineries are spread wide in the region, with most of them situated near broken oil pipelines. The proceeds from these illegal refineries have often times been used to fund the activities of the different militant factions in the region. Nigeria loses $1 billion annually to oil bunkering.
The Flare Gas Recovery program also aims to reduce gas flaring by 2020. Nigeria is one of the world’s gas flaring nations, and many have complained about its effect on the communities surrounding the oil companies that flare gas, and the overall effect on climate change. It is estimated that Nigeria loses N868 million daily to gas flaring, i.e. the worth of the gases (700 million standard cubic feet of gas per day), which are usually by-products of refining petroleum, released.
The joint venture will create jobs for Nigeria’s teeming unemployed youths, and also probably lead to Nigeria profiting off the refineries and flare gas. Nigeria has already granted licenses to 38 modular refineries in the Niger Delta region of the country, with two expected to begin operations before December 2018. The joint venture will ensure that more modular refineries can be constructed by the Nigerian government, and along with the Dangote refinery being established in Lagos state, Nigeria, increase the output of Nigerian oil, reduce importation of refined oil and, hence, oil prices.