Monday, 5 July 2010

Nigeria and China in negotiations over an $8 billion oil refinery deal

Nigeria and China are in negotiations over an $8 billion oil refinery, which will be built locally, once the agreement is approved by the Nigerian National Petroleum Corporation (NNPC).

The two countries, agreed to $23 billion of funding to build three new oil refineries and a petrochemical complex in the West African nation, back in early May. The construction of the facilities is aimed to aid Nigeria produce the estimated 750,000 b/d needed to curb imports of refined petroleum products.

At present Nigeria's four existing refineries have a combined capacity of 445,000 b/d, however some are unable to produce maximum output due to ineffective equipment and poor maintenance, which has forced Nigeria to depend on imports to meet its refined-fuel demand.

It is expected that the new refinery could potentially raise Nigeria's refining capacity above 40ml litres of petrol compared with the current capacity of 18ml. The general manager of Greenfield Refineries, Mr Adebayo Ibirogba, said that the deal will be negotiated between NNPC and a delegation of Chinese representatives.

“Although the talks have been exploratory for now, we're positive that a deal can be signed after further discussions with the Chinese who will be in the country by Monday (5th July),” Ibirogba said in an interview.

Source: Nigeria Tribune

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