The Nigerian army said it had destroyed 13 illegal refineries in the Niger Delta – a small portion of the hundreds of such facilities that process crude oil stolen from pipelines in the Delta. The announcement comes soon after the federal government said it might legalize the illegal refineries as part of efforts to restore peace in the Delta and put out militant activity that has cost it billions in lost oil revenue.
Last year, the military destroyed as many as 181 illegal refineries, arresting 748 people that were suspected of participating in illicit refining, and confiscating crude oil and diesel fuel worth around $1.3 billion, Reuters reports. Other sources put the figure much higher, counting mini processing facilities.
Since the start of the year, the army has quashed another 50 refineries in the Delta.
The legalization plan, made public by Vice President Yemi Osinbajo last week, was tentative: Nigerian media quoted him as saying the government must find ways to create jobs for those earning a living from the illegal activity, adding that destruction of the refineries was not the right approach.
Also, Osinbajo said during his visit in the Rivers state last week that the amnesty scheme targeting militants who had agreed to lay down their arms and stop bombing pipelines would have to be expanded. The scheme, initiated in 2009, offers training and job opportunities for former militants.
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In a separate announcement, the federal government said it will commence payments of a $5.1-billion debt to international oil companies operating in Nigeria, including Exxon and Shell. Oil Minister Ibe Kachikwu said that the first payments will be made by the end of the month and that in return, Nigeria expects these companies to increase their investments in the country’s oil industry. He added that the debt settlement could bring a fresh $15 billion into the Niger Delta.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.