Abuja, Nigeria | – The Nigerian minister of state for petroleum Emmanuel Ibe Kachikwu has said $1.2 billion is required to carry out repairs and refining upgrades if Nigeria needs to terminate its dependence on refined oil imports in two years’ time.
Even though Nigeria pumps two million barrels of oil per day, the country’s lack of working refineries forces the government to use its foreign currency reserves to purchase refined oil products from other nations.
In a press conference regarding refineries upgrade financing plan in Abuja, Kachikwu said “We are still far from signing any contract with anybody,” “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.”
In a related development, The Nigerian Senate ratified a motion to suspend a concession agreement for the Port Harcourt refinery with Agip Oil Nigeria, a subsidiary of Eni last month because the deal allegedly lacked transparency.
The agreement would have allowed the Italian company’s local subsidiary Agip Oil to repair and operate the 150,000 barrels of oil per day refining facility. Eni had begun negotiations to form a partnership with the Nigerian indigenous oil firm Oando for the project, which would have allowed the Nigerian government to substantially 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 centre of the civil unrest.
However, on Thursday, a group named the New Delta Avengers promised to restart attacks on government and private oil facilities operating in the troubled region in July, meaning the violence could soon return.