By Foster Obi
Nigeria’s national oil firm, NNPC is in the final stages of talks with two consortium including top traders, energy majors, and oil services companies to refurbish its dilapidated refineries. NNPC is negotiating with such companies on timeline of upgrading several old refineries and expected to start a procurement process later this year, a senior official of the corporation said. Last month Reuters opened lead report on these talks. According to the report, the move is aimed at helping the country save billions of dollars on fuel importation.
Finance and trade related sources said the groups would be paid through the off take 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. The first group comprised the world’s largest oil trader, Vitol, with Italy’s Saipem, U.S. firm, General Electric (GE) and Nigerian traders, Sahara Group and MRS Oil Nigeria Plc and would refurbish Warri refinery in southern Delta state and the refinery in northern Kaduna state, the sources said.
A second consortium is made up of global commodities trader Trafigura, Italian oil major Eni, Spanish refiner Cepsa and Nigeria’s Oando. This group would carry out repairs at Port Harcourt, which consists of two refining plants, the sources said. Ibe Kachikwu, Nigeria’s minister of state for petroleum resources had said in February that the private investors in its refineries were to be announced this March. The Nigerian government, in October, 2017 revealed that 26 firms had shown interest in the plan to revamp the nation’s oil refineries in an investment worth over $2 billion.
