A $1.2 billion spending plan will allow Nigeria the refining upgrades it needs to terminate its dependence on refined oil imports in 2 years’ time, according to Oil Minister Ibe Kachikwu.
Even though Nigeria pumps 2 million barrels per day of oil, its lack of working refineries forces Abuja to use its foreign currency reserves to purchase refined oil products from other nations.
«We are still far from signing any contract with anybody», said Kachikwu regarding a concrete financing plan during a press conference in the capital of Abuja.
«The technical committee is still working on it and it has to go to the Federal Executive Council for approval before we move into throwing it open for interested parties.»
The Nigerian Senate approved a motion to suspend a concession agreement for the Port Harcourt refinery with a subsidiary of Eni last month because the deal allegedly lacked transparency.
The agreement would have allowed the Italian company’s local unit to repair and operate the 150,000-barrel-per-day facility.
Eni had begun negotiations to form a partnership with the Nigerian oil firm Oando for the project, which would have allowed Abuja to reduce its dependency on imported refined oil.
Nigeria’s oil industry and economy have been suffering badly, not only from the low oil prices but also from the persisting militant attacks on oil infrastructure that have crippled crude oil production.
The sabotages reduced Nigeria’s output from more than 2 million bpd at its highest point in 2015 to 1.4 million bpd last summer, the lowest production level in 30 years.
The militant groups have slowed attacks in recent months, allowing output to recover as the federal government negotiates with leaders in the Niger Delta - the center of the civil unrest.
On Thursday, a group named the New Delta Avengers promised to restart attacks on government and private oil ventures in July, meaning the violence could soon return.
Author: Zainab Calcuttawala