Nigeria’s state-run oil firm NNPC and China State Construction Engineering Corp (CSCEC) agreed on Thursday to seek $23 billion in funding to build three refineries and a fuel complex in Africa’s most populous nation.
The project, which would add 750,000 barrels per day of extra refining capacity, is expected to be funded largely through credits provided by a consortium of Chinese banks and China’s Export and Credit Insurance Corp.
Beijing is looking to grab a foothold in Africa’s biggest energy producer, with Chinese firms seeking to invest as much as $50 billion to acquire 6 billion barrels of Nigerian oil reserves.
Abuja says foreign companies must invest in developing Nigeria’s infrastructure and economy first, before they can begin to benefit from its oil and gas exports.
“We are about to deepen the existing technical and commercial relationships between China and Nigeria through the signing of a memorandum of understanding,” said Shehu Ladan, head of the Nigerian National Petroleum Corp.
The three refineries will be built in Bayelsa, Kogi and Lagos states. A location has yet to be confirmed for the petrochemicals complex.
The two companies did not provide a timeframe for the building of the facilities.
Despite vying with Angola as Africa’s top oil producer, Nigeria imports some 85 percent of its fuel needs because of the disrepair and mismanagement of its four state-owned refineries
Fuel subsidies — one of the few benefits most Nigerians see from their country being a major oil producer — cost it billions a year and the government has repeatedly said they will be abolished as part of deregulation of the sector.
“Over the next decade, NNPC desires to eliminate completely the current flood of imported petroleum products into Nigeria for domestic consumption,” Ladan said.
Upon completion of the project, Ladan said Nigeria would save more than $10 billion annually from the elimination of imported refined fuel products.
SOURCED FROM REUTERS