Updated: Agip to build new refinery in Port Harcourt

Nigeria’s Federal Government and Italian Oil giant, Agip have reached an agreement to build a brand new refinery in Rivers, South South part of Nigeria.

The refinery which will have a refining capacity of 150,000 barrels and will be located either in Port Harcourt or Brass is part of investments of the Oil giant in Nigeria totaling about $15billion.

This was disclosed by the Minister of State for Petroleum, Ibe Kachikwu after a meeting with Acting President Yemi Osinbajo and top management of Agip held at the Presidential Villa, Abuja.

“We had two meetings this morning, the first was the meeting between the ministry of Petroleum, NNPC and Agip oil company. I the first meeting we dealt largely with Agip’s investment in Zaba Zaba field and also their cooperation with us in terms of the repairs of Port Harcourt refinery where they are working with Oando and a few other people.

“Thirdly, we reviewed following my meeting with Agip OTC last week with their Chief Executive Officer Worldwide. We reached an agreement that Agip will build a brand new refinery of a 150,000barrels capacity which will either be located in Port Harcourt or in Brass and so today they reconfirmed that and they are preparing an MOU along those lines.

“Total investment from Agip, involved in both the Zaba Zaba plant field, power plant and the new refinery is in excess of $15billion so that is a major push in terms of our search fro investment,” Kachikwu said.

The Agip refinery if finally built will be the second private refinery in the country even as the government considers the establishment of modular refineries to up its local refining capacity.

Nigeria’s four state-owned refineries is reported to have installed capacity to refine 440,0000 barrels of crude oil daily, according to a report contained in the maiden issue of NEITI Occasional Paper Series released last year. There have also been calls for the government to privatize the refineries and build new ones as the Turn Around Maintenance for the four refineries gulps so much with not much output.

The Oil minister said the establishment of the new refinery restates the instance that oil companies who work in Nigeria need to move away from just spotting crude and begin to look at refining to help the country’s local capacity to meet consumption target in the country.

“So that new refinery taken along with what work they are going to do in the old refinery in Port Harcourt gives us a lot of momentum in our quest to try and localise our capacity to produce every refined petroleum product we need in the country and to meet the timeline for 2019 that we have been targeting conceptually.

“So it is very welcomed and successful meeting and we are looking forward to working with Agip going forward in working out the modalities and quickening the process to execute this major project” he said .

Kachikwu called on other multinationals operating in the sector to follow Agip’s lead to create other related industrial growth plans rather than just spotting crude.

He assured that there was no fear of protectionism as the government on its own will work to ensure best practices while exploring export models for its petroleum products.

“We are not saying Agip will take over our refineries, they are going to build their own refineries and that is no different from Dangote building a refinery and if our own will pack up because they are doing it that means we have to be doing something wrong. So if they are going to bring best practices we need to pursue those best practices because ultimately we must begin to look at an export model how do we like all the refineries in Europe and India begin to position refineries here to supply the African market.

“So market protectionism is not going to be the answer it is basically getting our own system up in excellent level of performance to be able to match international standards” he said .

 

Elizabeth Archibong