FG cuts $850,000 off refineries’ licensing fees


The Federal Government has slashed $850,000 off the licensing fees for modular refineries in an incentives splash, which also included the reduction in approval period for refineries to 14 days.

Investigations by New Telegraph revealed that government, which had for the umpteenth time promised incentives to investors, made this offer through the Department of Petroleum Resources (DPR) in a bid to end importation of petroleum products into Nigeria by 2019.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who had earlier made this promise, vowed to resign if the country does not become a net exporter of petroleum products by 2019.  

The three levels of approval for setting up private greenfield (new) or modular refineries in the country before now, take, at least six months. These have now been shortened to just two weeks.

This review, DPR said in a document, was in compliance with the recent directives by the Federal Government.

The directives, the oil industry regulator said, were contained in the executive order 001 issued on May 18, 2017, in particular, regarding “the promotion of transparency and efficiency in the business environment designed to facilitate the ease of doing business in the country.”

The template outlines service requirements with definite delivery timelines for all third-party/customer engagements across the value chain of the oil and gas sector.

Highlights of the document was the review of the timeline for the issue of a LTE and LTO for a petroleum refinery to two weeks each, while the processing for granting an Approval to Construct (ATC) for the same purpose was reduced to two weeks.

The DPR also pegged the fee and service charge in obtaining a LTE a petrochemical plant at $50,000 and N500,000 respectively, while for a LTO a petrochemical plant, the fee and service charge are $100,000 and N500,000 respectively.

The DPR also pegged the fees for the granting of conceptual design approval for oil and gas facility; granting of detailed design approval for oil and gas facility; granting of approval to operate oil and gas facility at N100,000 each.

Giving a breakdown of the various sums, the documents stated that for a LTE petroleum refinery, a fee of $150,000 and a charge of N500,000 is applicable and payable for delivery of service by DPR through the Treasury Single Account (TSA) portal on the DPR website or designated accounts provided on the DPR website.

“The three levels of approval for setting up private greenfield (new) or modular refineries are Approval to Establish, Licence to Establish (LTE); Approval to Construct, ATC and Licence to Operate (LTO). An investor must overcome the requirements in each level of approval before proceeding to the next,” the guidelines published on DPR website showed.

DPR has, however, undertaken a review of its templates and processes of license issuance for the petroleum industry, pegging the fees for granting LTE and LTO of a petroleum refinery at $150,000 from $1 million hitherto set for this.  

The DPR document disclosed that to be entitled to these fast-tracked services, applicants for LTE for a petroleum refinery must fulfil certain specific obligations such as the presentation of an application letter, project charter & fill a form; payment of the application fees of $50,000 and Service charge of N500,000; conduct site inspection and submission of design diagrams.

The guidelines for the establishment of modular refineries in Nigeria, the agency continued, were configured with the aim of shortening the approval time for licensing of refineries.

To woo investors to the project, DPR also reduced the licensing fee for new refineries from $1 million to $50,000. Government is desirous of refining at least 50 per cent of its crude output in-country, not only to reduce import dependence, but also be an exporter of refined petroleum products.

Other guidelines include the submission of technical narratives & business case; submission of safety provisions & Environmental Impact Statement; make technical presentation and other statutory submissions indicated on the Guidelines for Establishment of Hydrocarbon processing plants in Nigeria, 2007.

To secure a grant of ATC Petroleum Refinery, the DPR stated that applicants must present an application letter; conduct design and technical safety reviews; submission of design diagrams; submission of technical narratives & design safety case; submission of quality assurance/quality control (Integrity verification and validation) plans and project execution plans.

Others are the submission of environmental impact assessment approval of project; conduct design validation tests, model reviews; close out issues by conducting quarterly management reviews; and other statutory submissions indicated in the Guidelines for the Establishment of Hydrocarbon Processing Plants in Nigeria.

Source: New Telegraph

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