By Uche Usim
HAVING made his mark on the shipping and oil sector, the Executive Chairman of Genesis Shipping Worldwide, Capt Emmanuel Iheanacho, says he is set for a fresh challenge. He is determined to build a multi-million dollar modular oil refinery that will employ thousands of Nigerians and open up businesses in its host community.
Iheanacho, a former Interior Minister in an exclusive chat with Daily Sun recently said his motivation to embark on the gargantuan project was born out of patriotism and the need to show the world that Nigerians can competently handle such businesses.
He also said Genesis Group, which has the Integrated Oil and Gas Limited as the oil company arm, also has an aviation section.
He noted that plans are afoot to also delve into the fragile aviation sector in near future.
Iheanacho, said he is not deterred by the prevailing rough economic climate in the country, as he insists that taking giant steps in life to conquer greater heights remains his turf.
In this interview, he speaks more about the refinery and the journey so far.
We have approval from the Department of Petroleum Resources (DPR) to float the refinery. It’s a modular refinery. They came and inspected the location before giving us that approval. Setting up a refinery is a tedious undertaking in many respects. You have to get government approvals every step of the way from start to finish. You’ll get license to establish, after that you’ll get license to construct and after that, the license to operate. Let me say this; the type of project we are promoting is guided by the availability of all of those licenses and approvals. The project is not something you do under the table. In getting the approval, you’ll also answer a whole lot of questions with proof. Where you’ll get the raw material to refine? When you’ve refined, who will buy as in where will you sell? Environmental Impact Assessment (EIA), technical capability among others.
The refinery is to be sited at Tomaro, an island community in Lagos. All the Chiefs and Baales of that community and other adjacent communities have expressed their support. They said they had seen foreigners come here, speak about developing the place by investing in the area but end up disappearing. They say our case appears different. We also assured them we are here to stay. The youths in the area are also supportive. They know the benefits of having such a gargantuan project sited there.
It’s sad that Nigeria had for years, diverted its funds by allowing crude to be shipped by foreign vessels on a Free on Board basis. With this development, the added value on the crude oil in terms of the refining
income and jobs creation have been lost to other countries. The profit from all these ventures is left in foreign lands. It is high time we invested in our country and develop it. If we are successful at this venture, refined petroleum will be much cheaper than what we are paying currently.
You can’t locate a refinery anywhere you like. Our choice of the coastal areas is premised on the fact it facilitates easier fuel import. If you notice, abroad, you have most refineries located in the coastal areas. Again, other reasons are availability of seas, availability of deep water in close proximity to your shores, availability of adequate land where you can have contingency plan to manage issues, oil water separator, etc.
I’m ready to stand by the truth and what is right at all times. I’m not going to appropriate your property to build a refinery. I’m not going to force you to tell me what you know about building refineries. But if you think refineries are very important infrastructure for the country and I can articulate a sound business plan that I can take to the bank to lend me money to build a good one, why not? Yes, there are vested interests. In fact those vested interests could well be at work with some spurious reports about people building refinery in Ogogoro village and all that. We will continue on our own part because if we shy away from doing the right thing because people are opposing us, we would be a country of slaves and we don’t want to be that.
Let me say this, it is also these entrenched interests that are probably spreading the falsehood that our dredging has caused building is in Irede to collapse. You pressmen were there and you saw that there’s no dredging going on there yet. They said we are dredging and the works have caused buildings in Irede to crack and sink. Houses in Tomaro where the refinery is to be located have not cracked and it is those in Irede one mile away that have cracked. This is just unfair. People should stand by the truth. This project is a legacy project that will benefit generations to come. Let thousands of our jobless youths be engaged. With that crime will reduce. We want to reduce capital flight as well. It’ll attract other amenities like potable water, electricity, healthcare etc to these communities. Land that lies fallow is a waste and it shouldn’t be so.
Environmental Impact Assessment
The Environmental Impact Assessment (EIA) is ongoing and all these certifications are acquired in different stages. The EIA involves those who are in close proximity to that place. When we wanted to start, the people were there and they signed and showed their support. Public hearing will be done at the right time. It’s a big project. It’s not something done in secret.
Building a refinery isn’t a child’s play. It’s quite expensive. When I read in the newspapers about how much Dangote is going to spend on his refinery, I think they talk about $9 billion. Sometimes I am frightened to hear such amount of money. There are different prices for different categories of refinery. For instance, if you want to build a 20,000 barrels per day (bpd) refinery, you would need about $75 million but there is a caveat. The caveat is that it depends on what you want to produce. If you want to produce gas oil (diesel), fuel oil, naphtal, LPG, then it is about $75 million. But if you want to go a step further and produce PMS for the same 20,000 bpd capacity, then your investment amount will take you about a quarter of a billion dollars ($250 million). So, either way, it is a very expensive project. Like I told you earlier, it is one of the hardest things I will have to undertake and I’m not afraid to do it because I have done every other thing in shipping; but this the real challenge. To sit down and conceive this idea was quite a mental task. You have to get the experts who understand it to be able to put the feasibility together; to be able to give you presentation to DPR. To be able to talk in a knowledgeable way when I’m faced with experts who understand it. It’s really challenging but we need to really do it for our country.
To answer your question on funding, I will say that a businessman is not a banker. Banks’ job is to provide money for business and businessmen are to provide workable ideas that will impress the banks. Our own is to address the issue of feasibility, location and EIA among others. If we bring it and the banks start looking, they will look what you’ve done and even look at the possible cash flow; where you’ll get your crude from and all that. Once the bank connects the dots, it will provide the money. Having said all that, we could get the money from Nigerian banks; we could get the money from international financial institutions like AFC, AFRIEXIM and EXIM banks of different countries because you know that if a country is in the business of selling refining equipment, then they will give money to their own people to loan to the person who will buy it.
Well, government has to support us in so many ways. For instance sourcing funds for this project is a challenge. I am not asking the government to dash me money but if government can say I can write a letter to say I support this man, it will help a great deal. It can be bankable. There are so many things the government can do to help us. We must always remind the government that there some people who are ready to stake their reputation to enhance the position of this country. We cannot be a country where everybody you talk to speaks glowingly of the country as a good place to do business. It is so because we are letting others (outsiders) do what we should ordinarily do for ourselves. It is also a good place for business for those who like to refine our oil abroad. It’s a good place for those who have ships and want to carry our crude. But the opposite side is, if they didn’t carry our crude, who will carry it and our people will be working onboard the ship? We fought that for a long time with the NNPC. Just for us to carry the crude. We were not even talking about refining at that time. Now, we have honed that. We can carry the crude and even talk about building refineries. We have articulated the front-end engineering of our plant and it is absolutely done and submitted to the authorities waiting for vetting. So, we are doing what we are doing the right way.
We don’t have a commencement date yet because we want reply to a lot of things that we have sent out. We need licenses, certifications and approvals. We will commence only when all of those things are in our hands and then we go and get the money and then we can give a takeoff date.
My driving force is patriotism. There is the need for us to prove ourselves as a nation. We need to show that we’re not a nation that keeps creating business opportunities for all manners of people. We want to be able to manage our resources that God gave us. And the major resource that we have which is petroleum, we need to refine and turn it into something that can add value and sell to other people. The idea really is for us to turn Nigeria into a hub for refined products marketing; so, it’s not only a question that you come to Nigeria to buy crude, you also come here to buy diesel, kerosene that are all refined in Nigeria. We must see it happen. So, we expect all right thinking Nigerians to stand solidly behind us.
We do have foreign consultants who are providing inputs in terms of the bankable feasibility proposals that we have to take to the banks. We also have technical consultants who are looking at different aspects of the project. But the most important thing is that all of these consultants are understudied by Nigerian backups. In fact, if at any point in time, any of them drops out, we have well-schooled and experienced Nigerians to take over the job and that is the key essence of what we are doing.
We have quite a few. We have active subsidiaries and special purpose vehicles for doing different things. These are required organizationally to ensure we are able pigeon-hole every area of interest in a particular work that that SPV is doing. So, aside Genesis Shipping, Integrated Oil and Gas, we also have an airline arm.
The maritime sector has not really performed as well as it should but we hope to God that things will get better. We have a new administration in place and we are standing absolutely to support him with our advice and we pray to get what we didn’t get years ago.
Nigeria has a bright future I believe. In five years time, it will be wonderful.