Discordant voices have started trailing the review of fees for granting Licence to Establish (LTE) and Licence to Operate (LTO) of a petroleum refinery put at $150,000 by the Department of Petroleum Resources (DPR).
Though the agency review of its templates and processes of license issuance for the petroleum industry was in compliance with the recent directives by Acting President, Yemi Osinbajo, industry followers say it is still too high to be attractive considering the cost of building a refinery which a prospective owner will equally factor in during consideration to apply for licence.
The directives 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”.
According to the agency, 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.
Key point 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.
Whereas it pegged refineries at $150,000, the fee and service charge in obtaining a LTE a petrochemical plant was pegged 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.
DPR also pegged the fees for the grant of conceptual design approval for oil and gas facility; grant of detailed design approval for oil and gas facility; grant of approval to operate oil and gas facility at N100,000 each.
The new documents further disclosed that for a LTE a petroleum refinery, a fee of $50,000 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.
Besides, to be entitled to these fast-tracked services, applicants for LTE for a petroleum refinery must fulfill 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.
Others are 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.
On securing a grant of ATC a Petroleum Refinery, 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.
Also contained in the document include 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.
Accordingly, seekers of LTO a petroleum refinery, according to the document, are expected to submit an application letter; conduct pre-commissioning checks; conduct pre-start up safety reviews; submission of as-built design diagrams and technical narratives.
Before final access, applicants are further required to submit operations, maintenance and equipment manuals; submit technical conformance certificates of critical equipment and MCR tests; and conduct final facility inspection.
Observers say with this development, it will take time for investors to make up their minds and that will cause further drop in the needed investment in the oil and gas sector of the economy.
Many experts had expected refinery licence to fall close to $100,000.
