As part of the efforts to implement the “7 Big Wins” in the oil and gas sector, which were launched by President Muhammadu Buhari late last year, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has urged International Oil Companies (IOCs) to invest in building refineries in the Nigeria.
Speaking monday at a presentation to top Executives of ENI in Rome, Italy, at the beginning of his scheduled visits to IOCs to seek improved investments in the sector, Kachikwu enjoined the group to move beyond just the business of crude exploration to firmly supporting the vision of enhancing local production of petroleum products in Nigeria by building refineries in the country.
Explaining further, the minister stated that the major plan of the Federal Government is to stop importation of petroleum products in the long term and that it would be expedient that every IOC should invest in building a refinery with a çhain of distributions.
The Director of Press at the Federal Ministry of Petroleum Resources, Mr. Idang Alibi quoted Kachikwu in a statement yesterday as reiterating the urgent need for the building of refineries and power plants to drive the economy of the country.
The minister further clarified that the refineries could be built by the IOCs, and within a short period of time, investment in the venture could be recouped by direct sales model.
He gave a historical background of the challenges of the sector by stating that the investment is necessary now more than ever considering the fact that Nigeria’s refineries, which were built in the 1970s and 1980s are currently working at sub-optimal levels and cannot sufficiently cater for local needs, hence the country is heavily dependent on product importation which creates instability in supply and price of products in the country.
“The attempt by previous governments to privatise refineries and attract investment in refineries failed to yield the required result. The present government had promised to correct this by upgrading old refineries and building new ones, thus increasing local production capacity with an objective to reduce importation of petroleum products by 60 per cent in 2018, and by 2019 to become a net exporter of petroleum products and value added petrochemicals,” Alibi quoted Kachikwu as saying.
According to the statement, the meeting is in furtherance to Kachikwu’s commitment to the full implementation of the #7BigWins; which is the roadmap that focuses on the short and medium term priorities to grow Nigeria’s oil and gas industry.
The statement added that the meeting was rounded up with the signing of a Memorandum of Understanding (MoU) between the ENI and Nigerian National Petroleum Corporation (NNPC) with ENI committing to the refurbishment of the Port Harcourt Refinery, building of Phase 2 of the Okpai Power Plant and further investments in Nigeria’s oil and gas industry worth over several billions of Dollars.
In continuation of the ongoing investment drive in Italy, the statement revealed that the minister will be meeting the Ministers of Foreign Affairs and Economic Development of Italy to formalise this new trend of cooperation between oil majors and Nigeria and will also meet with 10 other oil and gas companies in Italy to further expand the partners of investments in Nigeria’s oil and gas sector.
This is coming as the Italian oil major, Eni has committed to deepen its participation in Nigeria’s oil and gas sector by revamping the Port Harcourt Refinery and building phase 2 of the Okpai Power Plant in Delta State.