At the 2017 edition of the National Association of Energy Correspondents (NAEC) Conference in Lagos, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, represented by the Deputy Director, Department of Petroleum Resources (DPR) Olumide Adeleke, said that Nigeria is not about to sell or concession “any” of its refineries.
The Minister noted that the lack of investments over the years and the subsequent decay of the refinery infrastructure meant they were no longer attractive to investors. The refineries, therefore, needed to step up their productivity to become attractive enough for investments.
“I said it in very many speeches that if our own refineries do not sit up, we probably, would be selling scrap metals in a matter of years and that is the reality. So, what this project has also done is motivated substantially, the NNPC because to take very seriously my drive to repair the refineries and get them working,” said Kachikwu.
Although, the Nigerian National Petroleum Corporation (NNPC) has said that Nigeria now has an average cost of production of $23 per barrel; the refineries are still not operating at full capacity owing to the poor state of the refineries and militant attacks.
” We sought externally for resources to finance the rehabilitation of the existing refineries, which was a very tall order, telling someone to invest $1billion in the refineries rehabilitation, with no equity, and wait for incremental volumes of refined products to recoup their investment,” said Kachikwu at the conference.
But the government has been successful in attracting investors to build new refineries. It was reported on Thursday that the Federal Government had selected two out of the ten investors who showed interest and competence to build 217,000 barrels per day refineries near the existing ones in Port Harcourt and Warri under the co-location concept.
LRR Group was selected to build a 117,000 bpd refinery near the existing Warri refinery, while a different company identified as JALEMBA will build a 100,000 bpd refinery near the present Port Harcourt refinery.
The NNPC believes that these two new refineries, together with the Dangote refinery, will be able to deliver on the estimated 41 million litres per day petrol consumption in Nigeria by 2025.