Nigeria, Oil Firm to Establish Two Refineries Worth $4.5 Billion

Nigeria is Africa’s largest producer of crude oil

Nigeria’s Federal Government has signed a Memorandum of Understanding (MoU) with the Petroleum Refining and Strategic Reserve Limited (PRSR), a renowned America-Nigeria joint venture, for the construction of $4.5 billion two modular refineries in the country.

Each of the refineries, expected to be completed and launched within 12 to 13 months, would refine between 30,000 and 60,000 barrels per day (bpd) of crude oil, and produce five million litres of petrol, diesel, kerosene and LPFO per day.

Minister of Trade and Investment, Olusegun Aganga signed on behalf of the federal government while the chairman of PRSR, Chief Edozie Njoku, endorsed for the company at a brief ceremony held at the ministry’s conference room in Abuja.

In his remarks, Aganga said the new agreement was part of the government’s National Industrial Revolution Plan aimed at ending the exportation of raw materials and jobs from Nigeria to the West, while encouraging the transformation of the raw materials and exportation of finished goods, which add value to the economy.

Aganga said: “This is part of the paradigm shift we talk about. We have to stop exporting crude oil and therefore we need more refineries. With the signing of this deal, I am sure the two refineries which will cost about $4.5 billion will be launched in a year’s time”.

The minister, who reiterated the government’s determination to improve the business climate and make Nigeria the preferred investment hub in Africa and globally, informed that the firm had a history of performance and trusted track records; having delivered on bigger projects in Russia and other countries.

He assured the firm of government’s technical support needed to accomplish the task, saying that the Nigerian National Petroleum Corporation (NNPC) was actively involved in the deal.

Aganga, while justifying private sector involvement in government’s transformation agenda, informed that the Eleme Petrochemicals was now 30 times more productive than when it was in the hands of government.

Also speaking, the Chairman of PRSR said the two refineries were part of a 30-month plan to construct six modular refineries in strategic places in Nigeria, pointing out that his firm would build simple refineries, “that will help tackle the problems of Nigeria as against the existing complex refineries.”

Njoku added that the six refineries, when completed, would have a combined capacity to refine 180,000 barrels of crude oil within the country and produce up to 30 million litres per day of refined oil products within 30 months.

The chairman said: “The refineries would be operated for the benefited of Nigerians by eliminating the current subsidy regime and significantly reducing the current market prices of kerosene and diesel by as much as 50 per cent”.

“During the construction timeline, over 10, 000 Nigerians will be employed and once operational, the six refineries will create over 150,000 direct and indirect jobs”, he added.

On the possibility of completing the pilot refineries on schedule, he explained that “modular refineries are comparatively easy to assemble in a relatively short time period”, adding that the company would produce.

Speaking in the same vein, the company’s technical partner, Graham Ford, described Nigeria as investment destination and expressed their readiness to partner the country to overcome its perennial crisis in the oil sector.