The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has disclosed that it will be difficult for Nigeria to dip its hands into its coffers to finance the repair of its decrepit refineries in Warri, Port Harcourt and Kaduna.
Kachikwu, said this recently in Riyadh, the capital of Saudi Arabia, where he confirmed it would take about $2.5 billion to fix the refineries and get them to work at 90 per cent production capabilities.
He was hosted by the Minister of Energy Industry and Mineral Resources of the Kingdom of Saudi Arabia, Khalid Al Falih, at the meeting, and explained there were options available to Nigeria to fix the refineries even though the country needs to immediately make the decision of going with one.
For a while now, the country has dithered on deciding on what ways to adopt to fix her refineries and end importation of petrol.
In its early days, the President Muhammadu Buhari led administration had said it would end importation of petrol by the end of 2019, when it hoped to have fixed the refineries and the 600,000 barrels a day processing refinery being built by Dangote Group comes on board. These, have however not happened.
But in his remarks in Riyadh, Kachikwu said: “I can’t make a final decision alone in terms of what options to be chosen. In terms of what options on the table for the refineries, NNPC negotiated with the investors for like one and half year after the president approved. Unfortunately, they couldn’t reach conclusion for whatever reason, we are obviously going to revisit the discussion. I think that’s the fastest way to go.
“The second option is that, we decided that we are going to dip our hands into our own internal funds, which we don’t have a lot of and make the money available.
“What is required is about $2.5 billion to re-kit the entire refinery and the reason why I don’t want to go that way is the fact that the country is constrained,” he added.
According to him, Nigeria’s third option was to approach countries that could set up petrol refining partnership with it.
While insisting that Nigeria was still a key oil and gas business destination due to its existing hydrocarbon resources as well as location amongst others, Kachikwu said getting the four refineries up and running was necessary without further delay.
“We are targeting those countries who want to put in investment either on a 100 per cent basis or collaboration with oil companies that have worked with them,” he explained.
According to him, his visit to Saudi Arabia was necessary to cement ties between both countries.
He noted that his visit yielded positive results, which may lead to massive investment from Saudi Arabia, including an independent refinery.
“We want to leverage on the huge success of Saudi government in terms of petroleum. Last year alone. Saudi Aramco, an equivalent of NNPC made about $200 billion as profits last year,” he explained.