Crown Refinery and Petrochemical Limited’s—a privately owned company whose core business is into refining of crude oil into premium petroleum products, has entered into a Memorandum of Understanding(MOU) with the Ondo state government to build a refining facility in the state.
The refinery which will be designed to process both imported paraffinic and Nigerian crude into finished petroleum products, oils and lubricants has been estimated to worth $500million.
The proposed project will have an initial capacity to refine about 30,000 BPSD but is expected to be scaled to 60,000 BPSD within the next five years, according to a statement by Kazeem Adeleke, Chairman of the company. The project is expected to be completed within 36 months.
“We are going into the business of refining crude oil”, Adeleke said. “The Government of Ondo State would provide the enabling environment and incentives to support us as we actualize this vital investment”
The project will be situated in the states free trade zone, in Eruna Ogboti village under Ilaje local government area.
Apart from the project having the capacity to refine crude oil, it will also be producing 120,000 tons of base oil and 25,000 tons’ lubrication oil on a yearly basis.
on the benefit that the project will have on the states, Kazeem explained that the company will be providing several infrastructural projects in the sates and would create massive employment opportunities for indigenes of the state
“The project host communities would benefit from infrastructural developments as we are partnering with Simens company to provide over 40 megawatts of power for the state. We are also going to be awarding scholarships program, entrepreneurial opportunities as well 2000 direct and indirect employment opportunities”, he noted.
The Nigerian, and the West African market’s demand for petroleum products has been on the increase, but this demand has been largely unmet by the existing supply from refineries, across the region.
Amid a much higher demand for the product relative to supply is the fact that the West African sub-region still imports most of her refined petroleum product due to political will to develop a functional refinery. Nigeria, Africa’s biggest oil producer have four refineries that have long been sitting idle.
BusinessDay in a report earlier his week noted that Nigeria’s state owned oil firm and sole importer of crude oil into the country recorded a loss in full year 2018 despite Brent crude averaging above $70 in the larger part of the year. This poor performance is seen as a show of shame when compared with its counterparts from Brazil, China, Norway and Russia.
Despite this loss overtime, Nigeria has continued to maintain a status quo that is seen as unsustainable and detrimental to its economy. In 2018 alone, the country spent N730.9 on subsidy which it has stylishly called under-recover, BusinessDay reported this week.
In light of this shortfalls in supply, that the private players are coming into the sector to bridge the gap.
Africa’s riches man and chairman of Dangote refinery, will be flagging of his refinery with a production capacity of 650,000 Bpd in 2021.
“The market is deep enough! For us, it is more of contributing to an industry output that will meet the demand”, Kazeem noted.
Also, note should be taken of the wider West African market, which provides additional opportunity for export.
On his part, the governor of the state, Rotimi Akeredolu said the state will continue to render utmost support in seeing that the firm achieve success in line with its vision and mission statement.
According to him, the investment is a much needed one for the state to create jobs and open us the economy to growth opportunities hence the state has provided the firm with 190 hectares of land for he execution of the project.
MICHAEL ANI
