Mr. Olusegun Aganga, Nigeria’s Trade and Investment Minister said the deal was in line with a U.S.-Nigerian joint venture comprising Vulcan Energy Corp. and Petroleum Refining and Strategic Reserve Limited.
An electronic message from the office of the Minister, disclosed that Venture group signed a $4.5 billion (N697.5billion ) deal to build the refineries in collaboration with the Nigerian National Petroleum Corporation, (NNPC).
Two of the refineries are expected to be completed within a year.
“We are working in collaboration with the Ministry of Petroleum Resources and the NNPC; we are working together as a team to ensure that in 12 months’ time, we witness the commissioning of the refineries,” Aganga said.
Nigeria, Africa’s largest oil producer, plans to boost foreign investment in industries by making it easier to do business in the country. The government is focusing on changes that can improve the investment climate and on the overhaul of industries.
The continent’s most populous nation, with more than 160 million inhabitants, relies on foreign fuel supplies for 70 percent of its requirements because of inadequate refining capacity, Diezani Alison-Madueke, Petroleum minister, said in November. It exchanges 60,000 barrels a day of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Ivory Coast, according to NNPC.
The refineries are to be located in areas where there are crude oil pipelines in collaboration with the Nigerian National Petroleum Corporation.
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 LPFO.
Aganga, signed on behalf of the Federal Government, while Jim Mansfield, vice-president/director, Vulcan Petroleum Resources Limited, and Edozie Njoku, chairman, Petroleum Refining and Strategic Reserve Limited, singed of behalf of their companies respectively.
Also present during the signing of the MoU, was Chukwuemeka Ezeife, former Governor of Anambra state.
Speaking during signing ceremony, Aganga, said the event represented a major milestone and paradigm shift in President Goodluck Jonathan’s administration plan towards Industrial Revolution, job creation, wealth generation.
“This is a historic moment and a big step for us as a country .Apart from power, one of the critical areas which President Goodluck Jonathan has made a priority is to have functional refineries. My understanding is that by the time the whole project is completed, the cost is estimated at about $4.5bn.
“This is the beginning of changing our old paradigm from exporting just raw materials and exporting jobs to the Western countries. This is something that we have done as a country for so long time. There is no nation that has moved from being a poor nation to a rich one by exporting raw materials without having a vibrant industrial base. That is what we have to change for us to be a rich nation, and that is what of National Industrial Revolution Plan is based on.”
Aganga said that the Ministry of Trade and Investment would work together with the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation to ensure the actualisation of the projects.
He added, “The Nigerian Industrialisation Revolution Plan is based on areas where we have comparative and competitive advantage as a country. The signing of the MOU is the beginning of the process. The Ministry of Trade and Investment has not done this alone. We are working in collaboration with the Ministry of Petroleum Resources and the NNPC. We are working together as a team to ensure that in 12 months’ time, we witness the commissioning of the refineries.
“What we have done is to carry out due diligence on the prospective investors before we even start having discussions with them. We try to find out where they are coming from and their antecedents, whether they have done what they are planning in other parts of the world, and also if they have the money to invest.”
Also speaking during the event, Jim Mansfield of Vulcan Petroleum Resources Limited, said the investment was a testimony that “Nigeria is a good place to do business.”
“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. We also believe that Nigeria is open for business,” he said.
While Edozie Njoku of Petroleum Refining and Strategic Reserve Limited, , said that the company would work with its foreign technical partner and the regulatory authorities to ensure the successful completion of the project within the time frame.
“The six refineries will have a combined capacity to refine 180, 000 barrels of crude oil within the country and produce up to 30 million litres per day of refined products within 30 months. The entire modular refinery complex is built in the United States, including all piping and electrical and test operated to assure that each plant will achieve 100 per cent of its approximately five million litres per day production capacity.
“It will take approximately six months to construct each refinery in the USA, one month to test and dismantle the refinery for shipping; one month to commence shipment of the refinery complex to Nigeria; followed by four-five months to re-assemble the refinery in Nigeria and commence full production. The modular refinery is far easier to construct and maintain, and it can be constructed at any place and relocated to any site depending on the need.