Nigeria Embark on Oil Massive Refining Project

oil-nigeria
Nigeria is Africa’s largest producer of crude oil

Nigeria has signed an agreement with an American firm, Vulcan Energy to build six oil refineries worth $4.5 billion, government has said.

The deal signed on Monday has been described as essential because Nigeria despite being Africa’s largest crude oil producer still has to import the finished products.

The six refineries will have a combined capacity of 180,000 barrels per day.

“This is the beginning of changing our old paradigm from exporting just raw materials and exporting jobs to the Western countries,” Trade and Investment Minister Olusegun Aganga said in the statement.

In a statement, Jim Mansfield, Vulcan’s vice president said the agreement highlighted Nigeria’s appeal as an investment destination.

“The funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business,” Mansfield was quoted in the statement as saying.

According to the agreement, two refineries would be completed within a year.

The reform of the Nigerian oil sector began last week when President Goodluck Jonathan fired the chief executive of the state oil firm Nigerian National Petroleum Corporation (NNPC), and several top managers.

Corruption and poor management has plagued the Nigerian oil sector since oil was discovered in the country in 1961.

In April, a parliamentary report alleged Nigeria had lost $6.8 billion from 2009 to 2011 through a corruption tainted fuel subsidy programme.

The report criticized the NNPC and called for an overhaul of the state oil firm.

Jonathan has since appointed new key directors for NNPC’s exploration and production, refineries and petrochemicals, commercial and investments, and finance and accounts units.

The firm’s newly-appointed group managing director Andrew Laah Yakubu, has pledged to tackle the challenges head on.

Nigeria produces about two million barrels a day of crude, making it the world’s eighth largest producer of oil.