Operators Claim Ignorance Of Revocation By DPR Akwa Ibom Threatens To Pull Out Of Amakpe RefineryA SEARCH through the official website of the Department of Petroleum Resources (DPR) yesterday revealed that only nine of the proposed refineries still have valid licences after the government agency compulsorily and generally revoked them for 'lack of performance' in March 2007.Firms that were issued either Licence to Establish (LTE) or Approval to Construct (ATC) in 2006 (some of which were allegedly revoked in 2007) include Starrex Petroleum Refinery Limited; Akwa Ibom Refinery and Petroleum Company; Union Atlantic Petroleum Limited; Obat Refinery Limited; Amakpe International Refinery; Total Support Refineries; Badagry Petroleum Refinery Limited, and Clean Water Refinery.Others are Niger Delta Refinery & Petrochemicals Limited; NSP Refineries & Oil Services Limited; Ode Aye Refinery Limited; Southwest Refineries and Petrochemicals Company Limited; Choice Wood Consortium Nigeria Limited; Orient Petroleum Resources Limited; Qua Petroleum Refinery Limited, and Rivcats Petroleum and Energy Limited and Sapele Refinery Limited.The decision to revoke the licences, according to government, was taken after an appraisal, which showed that none of the operators had concrete arrangement for full takeoff. But the Department of Petroleum Resources (DPR) said any of the de-licensed operators could reapply.Applicants were to meet new conditions, including paying of other fees, 'since whatever payment that may have been made for the old licenses has expired with the revocation.'Findings suggest that most of the operators, indeed, intensified efforts to reclaim their licences. So far, only moves by nine of them had been successful.The owners have variously lamented lack of access to funds to execute the capital-intensive projects.However, two of the refineries not listed on the DPR website ' Orient and Tonwei ' yesterday claimed that their licences were still intact, listing funding and market challenges as impediments.Claiming that no other operator has a clear blueprint for delivering on the mandate, Tonwei Refinery Limited said it had done foundation stone-laying ceremony and succeeded in securing World Bank's guarantee for $2.5 billion funding.Its Chairman/CEO, Prince Timi George Tongubor, said the company's licence was spared consequent upon the fact that it showed serious commitment, a claim that was corroborated by the DPR yesterday.Tongubor told The Guardian, at the weekend, that no other operator except Tonwei had successfully laid foundation since 2002. He said the company had secured reasonable commitments from financiers of the project.Similarly, Sunny Okoye, a director in Orient Refinery, said the company license was not revoked.'Of course, we still have our licence intact,' he said. 'I don't know about that (alleged revocation). What I know is that our own (license) is valid. Ours never entered that mode of cancellation.'We are the only people, who fulfilled the criteria that were set up in the first place. That is the point. Our license is very valid and we have a letter to that effect.'On challenges, Okoye said the uncertainty in the global market and 'peculiar characteristic of the country, including the political issues in the last three years,' have been 'the major issues' militating against progress.In 2009, when The Guardian visited the proposed Nsugbe site of the Orient Refinery, a layout was being set on the expanse land for what the stakeholders at the time said was the eventual arrival of the 'prefabricated' structure.But not much progress has been recorded since then. Las week, a source in the company said that although Orient was facing funding challenges, 'it is now actively engaged in oil exploration and production.''The key point is completion of the funding process. This thing requires external funding, however you look at it, because it is capital intensive,' Okoye said yesterday.HOWEVER, in a telephone chat, the officer in charge of refineries at the DPR, Mr. A. O Adeleke, explained that neither Tonwei nor Orient is currently in the list of substantive licencees for private refineries.He said while Tonwei was spared in 2007, its license had 'expired' again and it was yet to renew it.Adeleke explained that only few of the refineries were 'active and prospective and we are sure that something can come out of them.'According to him, Tonwei was given a licence to establish (LTE) a refinery, 'which expired and was magnanimously renewed, and it expired again.'He said private refinery licences were renewed at different times as the refineries qualified.'The main issue,' he said, 'is funding, not technology,' because 'refinery business is capital intensive.''After that of 2007,' he explained, the DPR 'has not done any kind of general revocation. They (the refineries) know when their licences expired, and, naturally, if anyone comes to us to validate, we guide him accordingly.'Reacting to claims that some of the licences do not stand revoked, Adeleke retorted: 'They can't even construct. They will come to us. We do have such requests. They come to validate, to check whether the licences can still be used; and we always guide them appropriately.'But Tongubor insists that Tonwei is on the march to successfully completing the financing process.'We are serious about delivering the project. Unfortunately, the policies surrounding private refinery projects in the country are not encouraging,' he stressed, adding that the company hopes to complete Environmental Impact Assessment (EIA) soon to enable it commence construction activities.TONWEI secured licence to construct a refinery and supporting facilities on a 50-square-kilometre land owned by different communities at Ekeremor Local Government Area of Bayelsa State.In an email exchange with The Guardian, the Tonwei boss, Tongubor, said: 'After the foundation stone-laying ceremony, which took place on October 19, 2002, the company mobilised to site in preparation to commence construction.'But this was put on hold as the Board of Directors of the company, in its wisdom, decided to review details of the project with a view to incorporating improved process technology; increase the refinery capacity and make the project more robust.'Consequently, the engineering design of the proposed refinery was upgraded, while the design capacity was increased to 200,000 barrels per stream day (twice the original capacity).'To all intents and purposes, this was done following a need assessment for strategic positioning and it was carried out with the agreement of the financiers.'Tongubor disclosed that the project is geared at the establishment of 100,000 x 2 barrels per stream day (bpsd), privately-owned, export-oriented refinery to be sited between the rivers of Ramos and Dodo ' an Island bordering Bayelsa and Delta states. The location is at presently owned and occupied by the Agge, Aghoro, Azamabiri, Ogbeintu and Orobiri Communities, among others.'Estimated construction cost of the investment, as determined by our various financial and technical experts as at 2010, is about $2.5 billion price estimated levels,' he added.Although the project witnessed several setbacks at all levels, especially following the restive situation in the Niger Delta in the past years, Tongubor listed 'laudable successes' the company has recorded.These include obtaining a license to establish a refinery from the government; obtaining a Certificate of Revalidation of the license from the Ministry of Petroleum Resources; and meeting extremely demanding international standards for the engineering design of the project.He continued: 'We have also secured commitment from our financiers for the provision of funds to the tune of ($2.5b) ' they are ready to transfer same to an escrow account dedicated to the project.'Also secured World Bank Group's Provisional Acceptance/Notice of Registration and Willingness to provide insurance guarantee to cover the loan/equipment for the project and secured the consent of the host communities/state.'Having secured in principle foreign funding for the project (in form of equipment and other items), we believe it is proper to have logistics on ground before the foreign financiers and the technical team arrive to commence mobilisation to site.'It is in light of this and other considerations that the board has decided tosolicit for a facility from local investor(s). This we intend to utilise as a bridge loan running cost, to enable us move to the next stage of the project wherein our technical partners will commence in effect. This stage is critical and, indeed, instrumental to the overall success of the project.'We seek to attain the milestone required by the government for crude oil allocation (payable by us), which is composite of the issued licence. It is the government's support, commitment and contribution towards creating an enabling environment that is driven by the private sector.'AMAKPE Refinery has been a subject of controversy in recent times. At the climax of the conflict, the Akwa Ibom State governor, Godswill Akpabio, ordered operators of the abandoned project to commence work if they wanted to retain the $10 million equity the state government invested in it.Akpabio, who gave the order at a forum held in Florida, United States of America, said the government invested the money as part of its contribution to the take-off of the project even though it was a private sector initiative.Answering questions from indigenes of Akwa Ibom in the United States at the annual convention of Akwa Ibom State Association of Nigeria (USA INC), the governor said if the initiators were not interested in the project any longer, the state's fund in it should be refunded.'The Amakpe Refinery was a private initiative that was supposed to have started way back,' Akpabio said. 'The negotiations for the establishment of the project were concluded by the previous administration but towards the end of the administration, the state government that granted the approval instituted a lawsuit against it, demanding the refund of its 25 per cent equity.'He explained that when he took over in 2007, he revisited the case and signed a fresh Memorandum of Understanding (MoU) with the operators while the government's involvement was reviewed.He regretted that since that was done, the operators had not made any attempt to commence work while holding on to the state's commitment.'The desire to establish a refinery dates back to the days of the previous administration,' he said. 'Based on the agreement reached, the state government paid $10 million into an escrow account.'The operators withdrew the money without the knowledge of the previous administration, which led to litigation. The withdrawal was made without any work done at the site.'When I became governor, we met with the initiators of the project and an agreement was reached. Since then, we have not heard anything from them.'The refinery was to be built by Amakpe International Refineries Nigeria Limited at Eket. Both chairman of the company, Henry Amanam, and his vice, Mrs. Helen Robert Ikpe, are based in the US.Industry sources maintained at the weekend that most of the licensees had long abandoned dream of establishing refineries while others, who claim to be working on their projects, have no relevant approvals.'Many of them have not even done feasibility studies; they only pretend to be doing something about the projects,' the source said, alleging that, 'highly influential individuals in the sector are determined to ensure that the refinery projects do not come on board.
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