A consortium of investors from South Korea has announced plans to build four 100,000-barrel capacity refineries in various locations across Nigeria.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, made this announcement at the maiden edition of a summit organized by the Crude Oil Refineries Owners Association of Nigeria in Lagos. He stated that the Federal Government is encouraging investors to build refineries by providing an open environment for all.
Lokpobiri noted that approval was recently granted to invite the South Korean consortium to establish these refineries in four different locations in Nigeria. He emphasized the government’s adoption of the public-private partnership model to unlock investment in the midstream and downstream segments of the oil and gas sector, leading to the establishment of more modular and mega refineries.
The oil minister highlighted the Federal Government’s openness to equity investment in modular refineries and other upcoming refineries as a step towards ensuring energy security. He mentioned the Nigerian Upstream Petroleum Regulatory Commission’s development and publication of the domestic crude supply obligation guidelines to ensure transparency in the oil industry and provide access to feedstock for local refineries.
Lokpobiri also emphasized the government’s prioritization of stakeholder collaboration to effectively implement the recommendations of the Modular Refinery Committee, which aims to give special concessions to local refinery owners and guarantee feedstock to their refineries.
He announced the government’s plans to ensure the complete deregulation of the downstream sector and put in place a necessary framework to mitigate the impact on the poor masses. The ministry has facilitated easier access to existing tax and other exemptions on refinery equipment importation to make Nigeria self-sufficient for petroleum producers and become Africa’s petroleum refining hub.
Lokpobiri mentioned the Petroleum Industry Act (PIA) and the National Gas Infrastructure Fund, which sources its funds from the sales of petroleum products in-country. He expressed the intention to review the PIA to enable a portion of the fund to be used for supporting infrastructural development for refineries, similar to the gas value chain.
Through the Petroleum Technology Development Fund and the Nigerian Content Development and Monitoring Board, the government is prioritizing partnerships with international institutions for knowledge transfer in refinery operations and investment in research and development to support technological advancements and innovation in the refining sector.
The ministry also plans to collaborate with existing refineries to create an apprenticeship program to develop expertise in refinery operations.
To discourage crude oil theft and illegal refining, the ministry has established an international emergency committee focused on home-grown solutions to in-country refining.
