The Nigerian National Petroleum Corporation said on Wednesday that it had secured financing for the rehabilitation of the nation’s ailing refineries.
The Group Managing Director, NNPC, Mallam Mele Kyari, disclosed this without providing details.
Kyari said the NNPC was pursuing “a different model” for the refineries, including the type used by the Nigeria LNG Limited.
The NLNG is jointly owned by the Federal Government, represented by the NNPC (49 per cent), and three international oil companies, namely Shell (25.6 per cent), Total (15 per cent) and Eni (10.4 per cent).
Nigeria, Africa’s top oil producer, relies largely on importation for refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.
The refineries, which are located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day but have continued to operate far below the installed capacity.
Kyari, in statements posted on Twitter by the NNPC, said, “We made a very conscious decision to shut down our refineries. Today, after proper scoping, which was not done in the past, we know exactly what to do to get them back on stream. We have also secured financing to make sure they work optimally.”
“Aside from proper scoping, we’re also going to have an operation and maintenance contract, a different model of getting the refineries to work. We are looking at the NLNG structure where world-class processes will always be in play. We’ve seen it work before with success.”
In the first term of the President, Major General Muhammadu Buhari (retd), the NNPC had planned to rehabilitate the refineries to attain a minimum of 90 per cent capacity utilisation.
The plan was to use third-party financiers and the original refinery builders to provide the requisite funding and technical support.
However, after over one and a half years, negotiations with financiers were stalled in December 2018 due to varying positions on key commercial terms.
Kyari, who took over leadership in July 2019, had reiterated his plan to revamp the refineries and end fuel importation by 2023.
“We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries. We will support the Dangote refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023,” he said at the time.