Nigeria is set to take on a US$4.5 billion project to build six new oil refineries after a memorandum of understanding was signed between the Nigerian government and Vulcan Petroleum Resources
The construction of the first two new refineries is expected to be completed next year, while the four remaining facilities are expected to be achieved in less than three years, according to Vulcan, a subsidiary company of the US private equity firm Vulcan Capital Corp, and its partnering company in this project, Petroleum Refining and Strategic Reserve (PRSR).
Nigerian Ministry of Trade spokeswoman Yemi Kolapo said, "Each modular refinery, when completed, will refine up to 30,000 barrels of crude oil per day and produce up to five million litres of petrol, diesel, kerosene, and liquid petroleum fuel oil (LPFO)."
Nigeria currently has three oil refineries with a potential capacity of 445,000 barrels per day. These plants, however, run at less than three-quarters of this capacity and meet just a fraction of the country’s domestic fuel needs.
The new refineries will increase Nigeria’s self reliance on oil due to the associated decrease in Nigerian crude oil exports and refined oil imports.
PRSR chairman Edozie Njoki explained that, prior to installation in Nigeria, the six refineries would first be constructed in the US to ensure their efficiency.
With regards to those Nigerians sceptical about additional refineries, Njoku stated, "Nigeria needs new refineries. The refineries already in Nigeria are on their last legs and will cost the country millions to turn around."
Jim Mansfield, vice-president and director of Vulcan, said in a statement, “The funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business.”
Mansfield added that Vulcan “believe that Nigeria is open for business” despite several similar attempts in recent years to develop Nigeria’s oil sector.
May 2010 saw Nigeria enter into an agreement with the China State Construction Engineering Corporation (CSCEC) to establish three new Greenfield refineries and a petrochemicals complex, which was subsequently unsuccessful.
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