A Review of the Nigerian Energy Industry

Nigerian banks can fund refinery projects – Aig-Imoukhuede

05 March 2013, Lagos – Nigerian banks have the capacity to raise funds to for the execution of new refinery projects in the country, Mr. Aigboje Aig-Imoukhuede, Managing Director of Access Bank Plc, has said.

Aig-Imoukhuede, who maintained that funds spent by the government in the last few years on subsiding petrol could build about five new refineries for the country, stated that if not for challenges of irregular regulatory practices in the nation’s oil and gas industry, some of local banks could actually foot the cost of building a 200,000 barrels per day refinery in Nigeria.

According to him, a 200,000bpd capacity refinery could be built in the country at a contract cost of about N15 billion, which, he said, could be sourced locally and without support from abroad.

Aig-Imouhkuede said: “If we think we have problems in the upstream sector, I think the downstream is perhaps a lot more notorious.

“We have stalled production of refineries with the capacity of 450,000 barrels per day such that they are operating at 15 per cent capacity.

“And yet we produce this crude but export the crude only to bring it back to ourselves at a much high price. I think there is absolutely no need for it.

“The subsidy alone that has gone into this can support the creation of five new refineries.”

He continued: “It costs 15 billion to construct a refinery that is about 200,000 barrels per day capacity. I don’t think that is a lot of money.

“We don’t even need to look for it offshore because the local banks can support it, but then let us begin to look at what will happen and the confidence that it will bring on the international banks to bring in more money to support more and more of these refineries. But first thing first, things like regulation have to be resolved to make the industry stable”.

He debunked claims that access to adequate finance was a major setback to the participation of local banks in oil and gas operations, as he stated that insecurity in the country remained the more serious setback than access to finance.

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