Nigeria needs $1.2 billion to repair its refineries currently producing below installed capacity

EMMANUEL Ibe Kachikwu, minister of State for petroleum resources, has dismissed as untrue the rumour that the Port Harcourt Refinery has been concession to Oando and Agip companies.

Kachikwu told journalists in Abuja on Thursday that:”a technical committee set up by the government to undertake the review and selection process is yet to submit its report”,

The committee has come up with a holistic investment figure enough to fix the nation’s three refineries, he said, adding: “We have not selected any firm yet even though some firms have shown interests. We need about $1.2 billion to repair and bring the three refineries of the Nigerian National Petroleum Corporation, NNPC, in Port Harcourt, Warri, and Kaduna, up to 100 per cent production level.”

According to him, ”The total cumulative amount is in the $1.1 billion and $1.2 billion category between all the refineries. And that of course does not include the pipelines. You have got to address the pipelines and that is something else that is being done.”

Nigeria spent about N4.74 trillion on importation of petrol in the past year which was 30 per cent of the total foreign exchange outlay of the Central Bank of Nigeria, CBN.  Importation of petroleum products between January and December of last year totaled about 20 million metric tonnes.

”A total amount of N3.4 trillion was spent, the consumption of Forex from CBN was approximately 30 per cent of CBN total Forex outlay, and the logistic costs of that importation was about N1.34 trillion within the same one year period.’ ‘

Nigeria produced six million litres out of a total consumption of about 35 million litres per day.

”In the midst of this sort of statistics, it was absolutely critical that we move in to try to end importation of products, improve our refineries and get them up to 100 per cent. We are looking for financing of the repair and upgrade of the refineries. We are not concessioning refineries, it is simply a financing package,” he said.

Kachikwu said the government would invite the original refineries builders for the three refineries to undertake the repairs but stressed that it had not selected any financier for the repairs.

”Once we identify those individuals and see how we can make contacts with those who built the refineries – Saipem in Warri; JGC in Port Harcourt; and Chiyoda in Kaduna, to ensure that we go back to them.”

He said such step was necessary ‘’because they (builders) have the designs, engineering outlay and upgrade capabilities, and in some cases, they have the access to spare part.

”If we are going to achieve this within the timeframe we gave, we are going to meet them and I think we have largely decided that those are the people we should use,” he stated.

– June 9, 2017 @ 9:22 GMT |