FG urges IOC to set up refineries

Federal Government has urged international oil companies, IOC, operating in the country to invest in the building of refineries in the country.
According to a statement by the Ministry of Petroleum Resources in Abuja, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu made the plea at a presentation to top Executives of ENI in Rome, Italy.
The statement also disclosed that at the end of the meeting, ENI signed a Memorandum of Understanding, MOU, with the Nigerian National Petroleum Corporation, NNPC, with ENI committing to the refurbishment of the Port Harcourt Refinery, building of Phase 2 of the Okpai Power Plant and further investments in Nigeria’s oil and gas industry worth over several billions of Dollars.
Kachikwu called on ENI and other IOCs to move beyond just the business of crude exploration to firmly supporting the vision of enhancing local production of petroleum products in Nigeria by building refineries in the country.
He stated that the major plan of the Federal Government is to stop importation of petroleum products in the long term, adding that it would be expedient that every IOC invest in building a refinery with a chain of distribution.
According to Kachikwu, the refineries could be built by the IOCs, and within a short period of time, investment in the venture could be recouped by direct sales model.
Giving an historical background of the challenges of the petroleum sector, Kachikwu argued that investment in the refineries is necessary now more than ever considering the fact that Nigeria’s refineries which were built in the 1970s and 1980s are presently working at sub optimal levels and cannot sufficiently cater for local needs.
He said this was the reason why the country is heavily dependent on product importation which creates instability in supply and price of products in the country.
The statement further noted that attempt by previous governments to privatise refineries and attract investment in refineries failed to yield the required result.
It added that the present government had promised to correct this by upgrading old refineries and building new ones, thus increasing local production capacity with an objective to reduce importation of petroleum products by 60 per cent in 2018, and by 2019 to become a net exporter of petroleum products and value added petrochemicals.
The statement explained that the meeting was in furtherance to the Kachikwu’s commitment to the full implementation of the Seven Big Wins; which is the roadmap that focuses on the short and medium term priorities to grow Nigeria’s oil and gas industry.
“In continuation of the ongoing investment drive in Italy, The Honourable Minister of State will be meeting the Ministers of Foreign Affairs and Economic Development of Italy to formalize this new trend of cooperation between oil majors and Nigeria and will also meet with 10 other oil and gas companies in Italy to further expand the partners of investments in Nigeria’s oil and gas sector,” the statement added.