7 August 2018

Nigeria: Understanding the Niger-Nigeria MOU On 'Katsina' Refinery

opinion

Tuesday July 24, President Muhammadu Buhari of Nigeria and his Nigerien counterpart, Mahamadou Issoufou, presided over the signing of a Memorandum of Understanding (MOU) for the proposed Niger/Nigeria Hydrocarbon Pipeline & Refinery Projects. Steering and Technical Committees to drive the projects were also inaugurated at the occasion. The project aims to construct a crude oil pipelines from the Republic of Niger to transport crude to a border town in Nigeria where a refinery will be established to refine the crude.

But contrary to some unfounded reports that the location of the proposed refinery has been selected, I, as spokesman of the Ministry of Petroleum Resources, can authoritatively confirm that the location of the proposed refinery has not been determined yet, considering that the Steering and Technical Committees on the project has just been set up and they are saddled with the responsibility of carrying out the feasibility studies to determine the viability of the project, possible locations, cost of project and other key aspects of the project. The committee is scheduled to submit a preliminary report of the findings by December 2018.

Possibly because of the rumour that the proposed refinery will be located in the president's home state of Katsina and some other concerns, a storm of protest has greeted this initiative and many questions have been raised by some concerned Nigerians. Principal among them is the query that by showing some measure of interest in the proposed Niger-Nigeria pipelines and refinery venture through the signing of an MOU, is the Federal Government of Nigeria subtly trying to call the bluff of the people of the Niger Delta who have been giving the rest of Nigerians 'headache' because its region bears the oil and gas from whose revenue Nigeria has been largely sustained in the past sixty years?

This is one of many questions that some Nigerians who do not seem to see any sense in the project have raised about it. Some have also wondered why Nigeria should try to establish a refinery when she already has four, all of which are at various stages of disrepair or non-functionality. Why not make them functional instead of trying to establish a new one with or without the partnership of any neighbouring or distant countries, organisations or private individuals?

Is Nigeria not cheating herself by trying to help Niger when she has abundant oil and gas resources in the Niger Delta, more so as what she has is of better quality than what Niger has? Is economic reality being beclouded by some sentiment at the detriment of national interest? If not, what, really, is the wisdom---economic and others---behind the Niger-Nigeria refinery project? What, if any, will be the possible gains to be derived from this venture for Nigeria and Niger?

As indicated earlier, a thousand and one questions have been asked about the rationality of this project and these questions demand clarifications in order to calm some unnecessary agitation about an initiative that promises tremendous benefits to both our country and our neighbour to the north.

As international protocols go, what took place on Wednesday July 24 is not yet a green light given that the twin projects should go ahead. Rather, it was a pledge of understanding between Nigeria and Niger that there is some merit in the idea proposed but that further works should be carried out to ascertain its possible viability before a concrete decision can be made one way or another. As things stand today, there is nothing substantial that legally ties the hands of Nigeria on anything relating to the proposed venture. Nigeria's money has not been expended on the project.

The anxiety of Nigerians should be assuaged by the fact that the Nigeriens have said that a feasibility study is being undertaken to establish some concrete economic truths about the project and it is the outcome of that study that will make it possible for both they and us to decide whether or not to go ahead with the project.

Besides, since the project is still merely an idea in motion, some experts have even suggested that there can still be a rethink on the location of the refinery if the study establishes that the idea is a viable one, suggesting that Nigeria can demand that the refinery should be located not at a border town in our country but at a nearby location inside Niger so that Nigeria cannot suffer any environmental and other economic adversities incidental to the location of a refinery on our own soil.

If the feasibility study determines that the project will be a viable one, will the Nigerian government take up equity in this project? The answer to this question is that the project itself is envisaged to be wholly private sector financed and so far many potential investors have indicated great interest in participating in it. This fact should give otherwise agitated Nigerians the confidence that their country's leaders are approaching this venture with their eyes wide open and the country is not blinded by regional, cultural and kinship ties of the northern part of the country with our brothers and sisters in Niger as some tend to suggest. What does Nigeria stand to benefit from this project if everything is considered and a decision made that we should participate in it? The economic and other benefits are simply enormous. Some of them include the fact that there will be improved economic and social activities between Nigeria and Republic of Niger. Such socio-economic intercourse between the two brotherly nations will grant them shared prosperity, a state of affair direly desirable among poverty ravaged Africa.

It needs to be stated also that such an economic collaboration will give the two countries a greater or much needed impetus to fight insurgency and terrorism which are dark forces tormenting them.

The proposed partnership will also help to ensure availability of petroleum products in the northern of Nigeria and Niger on structured legal framework. What is happening now is that petroleum products either refined in Nigeria or imported at enormous cost to the national treasury get smuggled to Niger Republic and other neighbouring countries and Nigeria is severely short-changed.

What is more, there will be less carnage on our roads and deterioration (damage) to the road infrastructure. The difficulty of trucking petroleum products all the way from the southern parts to the northern parts of the country will be solved.

Perhaps one of the most important impact Nigeria's participation in the proposed pipelines and refinery project will have on Nigeria will be the creation of enormous employment opportunities for our citizens as well as the citizens of Niger. The much talked about South-South cooperation will be achieved.

Nigerians who seem opposed to the proposed project may have forgotten that the establishment of third party financed Greenfield refineries to improve domestic petroleum products sufficiency is a part of the country's short to medium term priority projects to grow our country's oil and gas industry.

As can be seen from the foregoing, if the dream of the Niger-Nigeria refinery comes to fruition, it will not be an idea that will solely favour Niger Republic; it will also serve a Nigerian need to ensure that all parts of her country have sufficiency of petroleum products to power her industries and to help in the transportation of persons and goods.

It is worth adding that a refinery in Katsina or anywhere else in the northern part of the country will not mean the Federal Government is abandoning its refineries in the Niger Delta. What is happening is that efforts are being made to get them back on track and to work at their full capacities. But even if these two goals are achieved, Nigeria still needs other refineries anywhere in the country to guarantee petroleum products sufficiency, which is why if the ongoing feasibility study on the refinery proves positive, Nigerians should enthusiastically welcome it as it will be beneficial to the country.

Idang Alibi is the Director, Press, Ministry of Petroleum Resources, Abuja

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