A Review of the Nigerian Energy Industry

Why we can’t build refinery in Nigeria – Shell

02 March 2012, Sweetcrude, ABUJA – Mr Malcolm Brinded, the outgoing Executive Director of Shell Petroleum Development Company (SPDC), says the company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Brinded, who is in-charge of the Upstream International unit of the company, made the statement in an interview with Nigeria State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell chief in Nigeria, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world.

“With respect to downstream, two comments there. Shell is divesting from refineries all over the world because there is a surplus of refineries; we no longer own any refineries even in the United Kingdom.

“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss.

“Which also means one can get refined products back again and pay very little for it to be refined,’’ he said.

Brinded said that building refineries was no longer profitable and that informed the company’s decision to invest in the gas sector.

According to him, Shell would continue to invest in the development of the gas sector, adding: “I do believe that investment in the downstream sector, especially gas sector in Nigeria, as I touched on, is very important.

“Nigeria has huge resources of gas that have yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.

“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.’’

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  • Yahaya O.M.

    Not a nice word. Building refinaries in Nigeria is not only profitable, it also reduces unemployment problem. Shell should stop exploring our crude 4 exportation.

    • Sounds like a little fignmoraereng. 10 days ago gases prices in Montreal where running between $1.38 and $1.40. Right now they are running between $1.42 and $1.44 so if they went up 14 cents today it’s because they went down 10 cents in the last week. Lets not take big gas price jumps out of context. No doubt the gas prices are beyond the fair price everywhere but there are many variables that lead us to the price we pay at the pumps. It is difficult to predict the price next week let alone 2 months from now.


    truth is bitter,but it has to be said by a well-meaning person.we need to explore our downstream gas sector.the existed refineries have to upgraded;not new ones.


    that was a bad word.wat was he even thinking b4 he that statement.i have uncooked rice i shouldn’t cook it in my house cos many pple r cooking. wat he said is nonsense

  • Building refineries wil only not solv unemployment in dis country but also boost our enconomy. So shell and FG should consider them.

  • Victor Emah

    I understand with SPDC, in as much as you’ll love to help the economy of the country, you still have to balance the economy of the company. This is business and not politics. Surplus refineries aint that economical. Let the FG rise up and revamp our refineries.

  • Ramiz Moussallati

    The truth when known would surely set us free.

    We should wake up from our slumber,Without refinaries we cant attain the Country vision which is VISION 20:2020 .

    We can and would by God Grace get there…
    There are millions of Nigerians who sleep and wake up thinking of the Transformed Nigeria…….

    The time is now …..We need a Revolution for the Transformation Project to be actualized.

    We need a peaceful transformation towards a great nation……..Nigeria is blessed by the Almighty God.

    Let us pray that soon the lord would visit Nigeria would a holistic solution to cater for every Nigerian needs in every part of the Country and any where in the world.Amen

  • Wow that was strange. I just wrote an extremely long comment but soon after I clicked submit my comment didn’t appear. Grrrr… effectively I’m not writing all that more than once again. Regardless, just wanted to say amazing weblog! 519369

    • hector

      Sorry to hear that, it really can be frustrating. This is the first time such a development would be brought to our attention. Our technicians will look into it. Thanks for your charitable remarks about our website, we will continue to strive to do better.

    • This question was on the news yeadertsy. The answer given was, People are saying they don’t want such a thing in their home town or near their backyard. That is a bunch of b.s. in my opinion. If the government allows the takeover of land by eminent domain to provide it to developers, why can’t they do that for this fuel crisis?Under this current administration, this and everything else has gone off the drawing board and went well beyond the nine yards.’ I believe a march on Washington would be in order.Oops, I got myself on a soap box.

    • there is absolutly no reoasn for the prices to rise, its bull crap, we own our own refineries right here in canada, like alberta and other places, just another scam for the government to take more money from us

  • The lack of refineries is a red herring used by the government to rationalize the drastic increases in prices in recent years. It is totally unrelated to the price of crude oil (also skyrocketing) and we have enough refineries for our needs. Gas prices are set by the oil-producing nations in combination with the major gasoline providers. The US government is in the pocket of the Saudis, which is why we have not put up a fuss. Everyone needs gas, and Saudis and oil companies like large sums of money, so we will be paying an exorbitant amount for gas forever unless someone stands up. It will take a concentrated civilian action to reduce the price, and even then they’ll probably only throw us a bone of a few cents per gallon.