Lagos Hints At Legalization Of Makeshift Refineries In Niger Delta

Illicit oil refineries in the Niger River Delta could be legalized in the near future as part of Lagos’ effort to reconcile the concerns of the oil-rich region’s natives with the national development plan, according to a new statement from the office of Vice President Yemi Osinbajo.

"We are saying there is a way out of violent agitation, but it is by creating opportunities and the environment where the people in the communities can benefit," Osinbajo said, according to the statement.

There are currently several “bush” refineries in the area, which are makeshift facilities that support thousands of jobs in the area and process stolen crude from nearby pipelines installed by multinational companies. The local leaders heading negotiations demand that the sites gain legal status.

If the community refineries become legal, it would ease the economic woes of the residents of the Niger Delta – an area now housing multiple separatist groups that lament the federal government’s unfair distribution of oil revenues across the country.

"Under the plan that is being developed, communities would come together working with their respective state governments, the federal government and private sector operators to work out a template for the establishment of modular refineries in the communities," the statement on Thursday said.

Related: U.S. Threatens OPEC As Oil Exports Hit Record High

The Nigerian government, which depends on the oil sectors for two-thirds of its revenues, has suffered financially from attacks by groups like the Niger Delta Avengers, though the militants have eased their bombings since Osinbajo visited the delta in February.

In 2016, the violent effects of this conflict led Nigeria to lose one million barrels of oil output a day, which led the Organization of Petroleum Exporting Countries (OPEC) to exempt the African nation from the terms of bloc-wide production reduction.

By Zainab Calcuttawala for Oilprice.com

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