Nigeria’s quest to refine own oil
In contrast to refineries’ shutdown in Asia and North America, Nigeria is getting set for an exponential growth in local refining capacity.
The Organisation of Petroleum Exporting Countries in its latest 2020 World Oil Outlook, estimated refining capacity additions on the African continent between 2020 and 2025 at around 5.20 million barrels per day based on the review of announced and planned refinery projects.
Nigeria’s Dangote Group’s 650, 000 barrels per day refinery is expected to start operations next year and may meet all of Nigeria’s white petroleum products demand and save the country about $10 billion yearly.
In September, the largest hydrocarbon firm in France, Axens won the bid for the multibillion-dollar BUA Group’s 200,000 barrels per day (BPD) refinery and petrochemical plant in Nigeria. In the same month, the Federal Government disclosed that it is in talks with some investors to give up majority stakes in the government’s four refineries.
Read Also: Oil majors are shutting refineries due to low demand, how will Nigeria fare?
The Nigerian National Petroleum Corporation has also announced plans to build a 200, 000 barrels per day condensate refinery.
Nigeria’s coming new refining age is predicated on the countries growth and energy demand potential, while European and North American economies have attained maturity.
However, Nigeria’s economic growth has been sluggish. With a population of over 200 million people,
Nigeria’s real gross domestic product (GDP) growth was projected to rise to 2.90 percent in 2020 and 3.30 percent in 2021 according to the African Development Bank. But the coronavirus pandemic has dimed the chances of attaining these growth levels.
A population growth rate of 2.60 percent means that Nigeria requires real GDP growth twice its population growth rate to stimulate economic activities, growth and development.
