President Muhammadu Buhari has approved a new model which will allow private investments in the country’s refineries.
This was disclosed by the Chief Operating Officer for Refineries, Nigerian National Petroleum Commission (NNPC), Anibor Kragha, during a plenary at the ongoing Nigeria Oil and Gas Conference in Abuja on Wednesday.
Kragha noted that the approval was part of steps to revamp the refineries in Port Harcourt, Warri and Kaduna.
He further explained that the investors will be paid profit on their capital, from incremental production of the refineries on agreed terms.
Kragha said: “Because of what is happening and the global trend, President Muhammadu Buhari gave approval for strategic investments to be made in the refineries. So, the investment model is basically this way: strategic investors who can bring refining expertise and funding will partner local players with downstream experience to actually go into the refineries, invest money and within 24 months to get us to 90 per cent capacity utilisation.
“We are in the preparation stage. We had meetings with Chiyoda, who is the original refinery builder of Kaduna (refinery) and JGC, who built Port Harcourt, and the idea for going with them is that because they do this consistently, they have access and we expect them to open their supply access to us to enable us get parts and pricing at better rates.”
He added: “We are getting a lot of interests and expressions from a wide range of people. GE has a consortium they are bringing, there is Eni and Oando as well. The ORB (original refinery builder) will sit together and come up with an aligned cost that we will put into financial models.
“The only way we are going to do this is that they will only get paid from incremental revenues that are generated by incremental production from the refineries. Essentially, they have to put their money where their mouth is and because we have technical expertise and funding, we can make these refineries work.”