Petroleum Africa
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Wednesday, February 28, 2018
State-run oil and gas firm NNPC is said to be in the final stages of talks to revamp Nigeria’s dilapidated refineries. According to a Reuters report, citing sources familiar with the matter, the firm is in discussions with two consortiums made up of top traders, energy majors and oil services companies.
The first group is said to be comprised of Vitol, Saipem, GE, Nigerian traders Sahara Group and MRS Oil Nigeria Plc. This group would refurbish Warri refinery in southern Delta state and the refinery in northern Kaduna state.A second consortium included Trafigura, ENI, Cepsa and Nigeria’s Oando. The four would carry out repairs at Port Harcourt, which consists of two refining plants, the sources said in the Reuters report.
Banking and trading sources told Reuters the groups would be paid via the offtake of refined products rather than cash, putting the burden on them to revive the refineries and keep them running smoothly to ensure their investments earn a return.
Multiple regimes have promised to fix Nigeria’s beleaguered refineries and over the years funds have even been allocated to do just that. However, despite funding made available no progress was made in bringing the refineries up to their original nameplate capacity. This lays a heavy fuel import bill on the government as it needs to import nearly all the fuel it consumes.
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