Proposed Bauchi Refinery: To Be or Not To Be

The need to establish additional refineries in Nigeria to boost the production capacities of the existing refineries in Kaduna, Warri and Port Harcourt has brought Bauchi, the capital of Bauchi State, in the Northeast region of the country to the picture.

The path which was created way back in 2007, typifies a situation where the Northeastern state will boast oil refining potency as Kaduna. The beauty of choosing Bauchi is the fact that large quantity of oil has been discovered therein unlike Kaduna, which has no drop of oil reserve. However, 10 years after, the dream remains tall.

Consequently, the Bauchi State House of Assembly has placed embargo on sale of land in some local government areas that were identified with hydrocarbon deposit in the state

The Chairman, House Committee on Information, Hon. Ibrahim Hassan, stated recently during a meeting with stakeholders and the presidential sub-committee on economic development in Bauchi State that the measure was to prevent the sale of such lands to people that are not indigenes of the state.

He said: “We learnt that in Alkaleri and Kirfi local government areas, some people are selling off their lands to people that are not indigenes of the state.

“The state House of Assembly has stopped that action because the areas are endowed with petroleum resources.

“We do not want incidences where we sell out lands and when it is time to start drilling the available natural resources, it becomes something else.”

The state’s pro-active stand has been praised by stakeholders in the oil industry, who understood the cumbersome nature of recovering lands already sold, especially if it is discovered to harbour essential natural resources.

In the same vein, the then state’s Commissioner for Information, Alhaji Muhammed Abdullahi, also stated that the construction work on the proposed $5 billion refinery project, about N725 billion, will soon commence.
Abdullahi stated that the project, which is being handled by a German Petrochemical Financing Firm, Shark Petroleum International, is being executed under a public/private partnership arrangement between the state government and the German company.

The commissioner said that the project was part of the commitment of the then Governor Isa Yuguda to fast-track the economic and industrial development of the state through private/public partnership.
“Already, Governor Yuguda has approved the allocation of a parcel of land along Bauchi-Jos road for the immediate take-off of the refinery project,” he said.

Abdullahi said that officials of the German consortium had inspected the project’s site and expressed the company’s readiness to ensure early completion of the project in order to accelerate the economic transformation of the state.
Abdullahi said that the refinery, when completed, will have the capacity to refine 100,000 barrels of crude oil per day, adding that the amount earmarked for the project would cover the cost of laying of pipes for conveying crude oil from Eket to Bauchi.

The building of the refinery in Bauchi State is part of efforts to develop oil and gas in the state.

The SPDC’s Chairman, Dr. Ganta Summer disclosed that the choice of Bauchi State by the SPDC was because of the abundant oil and gas resources in the state.

According to him, the company was ready to fund the project once the state government provided licence and land for the project.

“The SPDC will establish a training school and recruit 120 expatriates to train indigenes of the state in petroleum and gas exploration and mining,” he said.

Summer gave the assurance that when completed, the company would provide schools, water, electricity and hospital at the project’s site.

However, ten years after a memorandum of understanding was proposed, the project is still at its infancy stage.

In 2016, however, the Group Managing Director of Nigeria National Petroleum Corporation, NNPC, Dr. Maikanti Baru, said that the corporation has concluded plans to mobilise heavy equipment to Bauchi and Gombe states to commence oil exploration.

Speaking with journalists at Sir Abubakar Tafawa Balewa International Airport, Bauchi, Baru called on citizens of the two states not to panic when they see movement of the equipment into the states. Baru, who was received by senior officials of the corporation and Bauchi State Chief of Staff, Audu Sule Katagum, said his mission to the two states was to sensitise the people on oil exploration activities. He said: “We are here to signify our intention to sensitise the good people of Bauchi and Gombe states on our efforts to mobilise back into the Gongola Basin.

“Our intention is to start 3D seismic acquisition and cover as much of the basin as possible, to continue work in terms of exploring hydrocarbon in the North-East.

“Of course, our activities in the Chad Basin will also be re-activated as soon as we get the clear sign. “So our mission here is to sensitise the people that if they see the seismic crew moving about in their farms and drilling some boreholes, where we put our various geo-tools and dropping seismic lines across the various areas, they don’t get distracted or scared.”

On the prospects of getting oil in the states, Baru said it was good because of some explorations done in one of the wells, which was just outside Yankari Game Reserve. He said part of the reserve showed interesting find although not in commercial quantity.

Not much was heard of the project until recently when the Minister of State for Petroleum, Mr. Ibe Kachikwu, made another visit to the site. He made open his findings in a way that suggest that the proposal is fresh, saying that the Federal Government is planning to build a second refinery in the northern part of Nigeria and also plans to rehabilitate the Kaduna refinery in order to consolidate oil exploration efforts in that region.

Dr. Kachikwu said that necessary arrangements were being made to commence oil exploration in the region; key among them is ensuring that fiscal incentives are put in place to ensure uninterrupted operations once exploration begins.

“The North has to partner in our oil wealth in very many forms. Downstream is very key. What do we do if we find oil? We are looking at the potential of a second refinery with a pipeline running from Niger to the North at some point.

“The second refinery will create a big hub of activities. We are looking at how to develop and remodel the Kaduna refinery and improve its petrochemical complexes so that we can go back to being able to produce a vast array of products essential for petrochemical growth,” he said.

It will be recalled that exploration activities in the Chad Basin began in 1974, continued in 1996 to 2000 when gas was discovered in non-commercial quantity, but later resumed in 2014, but stopped due to insecurity in the North-East.

The NNPC noted that based on a recent survey by a subsidiary of NNPC, the Integrated Data Service Limited, and with the acquisition of state of the art technology in present data acquisition, we are confident that these efforts will lead to clearer definition of prospecting in the region.