- NNPC shops for $16.5bn for five-year investment plan
Chineme Okafor in Houston, Texas
The federal government wednesday disclosed that it had begun moves to withdraw all the licences and operational permits it gave in the past to private investors to build refineries in Nigeria which are yet to be put to use.
It said the decision to revoke the idle oil refining licences was recently reached and communicated to the Department of Petroleum Resources (DPR) whose statutory functions include processing application for various licenses, permits and approvals across the entire oil and gas value chain.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated this at a press briefing he had with journalists on the sidelines of the ongoing annual Offshore Technology Conference (OTC) in Houston Texas, United States.
The government had in the past granted licences to about eight private refiners to build refineries in the country which largely relies on imported petroleum products to run its economy.
However, only Dangote Group, has since put its licence to use and is now building aÂ 1.3 million metric tonnes per annum petrochemical plantÂ in Lagos which according to the firm, would be ready in the last quarter of 2018.
Kachikwu said in his response to a related question: â€œI have spoken with DPR on the matter. Those who have not been able to move forward will have their licences withdrawn.â€
He said the aim of giving licences was toÂ reduce the huge economic losses to fuel importation, meet local demand for products, and explore possible export of refined products from Nigeria to neighbouring African countries.
The minister also stated that the governmentâ€™s recent plan to encourage modular refining in the country would come with some kinds of incentives.
According to him: â€œIndeed, we have, since they will be located in states, land will be provided and the modular refineries will be peopled around private sector especially independent producers who already have the crude.â€
He equally repudiated persistent claims that Nigeria was an unfavourable investment destination for businesses and investors, stating that all the oil majors operating in her oil fields have for long benefitted from the countryâ€™s laidback laws which has for long left Nigeria with little economic returns.
According to him, the quarrels with the oil majors have been that they do not want changes in these business laws, a position the government has frequently refused to accept.
â€œNigeria has the best returns on any investments in the world. The terrain is good. A lot of latitude is given to investors to develop what works for them. Most of them know how to be resilient because they know the returns. Our resource base is huge. We have huge gas reserves, huge downstream opportunities.
â€œI donâ€™t know of any country that has that much resource, that income generation. I think we can favourably compete with Saudi Arabia,â€ said Kachikwu.
According to him: â€œSome of the best returns of the IOCs have come from Nigeria, and the IOCs know this but wonâ€™t speak out.
â€œWhere else in this world do you have a framework that hasnâ€™t changed for years? They have made the money alone in the past, but this time, we are going to make the money together,â€ he explained.
Meanwhile, the Nigerian National Petroleum Corporation (NNPC), has disclosed that it would be shopping for about $16.5 billion to execute several oil and gas projects it has lined up to undertake in the next five years.
The Group Managing Director (GMD) of NNPC, Dr. Maikanti Baru, said this at a function organised by the Petroleum Technology Association of Nigeria (PETAN) in Houston.
Baru, was represented by NNPCâ€™s Chief Operating Officer (COO), Gas and Power, Saidu Mohammed, at the meeting. He said the NNPC would seek to raise about $13 to $16.5 billion over the next five years.
The money he noted would be used to develop seven giant gas fields ($7 to $9 billion), upgrade the upstream assets of its subsidiary, the Nigerian Petroleum Development Company (NPDC) with $6 to $7.5 billion, and build gas infrastructure and power plants at the tune of $9 to$11 billion.
He also explained that other areas the NNPC would look out to investors are the construction and laying of 897 kilometres gas pipelines ($2 to $3 billion), design, construction and operation of Western Central Processing Facility (CPF) ($2.6 billion), design, construction and operation of Eastern CPF ($1.2 billion) and construction of three power plants with generation capacity of 3150 megawatts (MW) ($3 to $4.5 billion)
â€œFor the refineries, our plan is to rehabilitate, and revamp our existing four (4) refineries. On successful rehabilitation and revamp, our plan is to upgrade their combined nameplate capacity from 445,000 barrels per day to 700,000 barrels per day within the next few years. We would require investments of between $5 and $6 billion,â€ Baru added.