Federal Government and Nigerian Agip Oil Company (NAOC), a subsidiary of Italy’s ENI, have struck a deal to construct an unbelievable $15 billion refinery in the Niger Delta. The deal will also include Agip’s investment in the biggest power project in Nigeria whichc is to come on stream by the year 2020.

In this regard, officials of Agip held a meeting with acting President Yemi Osinbajo in the Presidential Villa, Abuja, on Tuesday with a view to opening discussions on the proposed investment.

The meeting agreed on the need to prepare a Memorandum of Understanding (MoU) for the construction of a 150,000 barrel per day (bpd) refinery by Agip in the Zabazaba field, located in Oil Prospecting Lease (OPL) 245.

However, the $15 billion announced by the government for the refinery and power project raised eyebrows among industry observers who wondered why a mid-sized refinery and thermal power plant would gulp that kind of money.

In comparison, they said the 650,000bpd refinery complex, including fertiliser and petrochemical units, being built by the Dangote Group at the Lekki Free Trade Zone in Lagos, is costing $9 billion.
The meeting, which had in attendance the Minister of State for Petroleum, Dr. Ibe Kachikwu, also discussed Agip’s assistance to Nigeria in the repairs of the Port Harcourt refinery.

Speaking with journalists after the meeting, Kachikwu said the deal is aimed at discouraging oil companies operating in Nigeria from continuous fuel importation and encouraging them to refine oil locally.
Kachikwu said the deal was in pursuit of the federal government’s commitment to increase capacity for local production and consumption of petroleum products with a view to ending fuel importation in Nigeria within a scheduled period.

“We just finished a meeting with the acting president and Agip. In the meeting, we dealt with the issue of Agip’s investment in the Zabazaba field and their cooperation with us in the repairs of the Port Harcourt refinery.
“We reviewed, following my meeting with Agip, an agreement that the firm will build a brand new refinery of 150,000 bpd capacity which will be located in Port Harcourt or Brass.

“They have accepted and are preparing a memorandum of understanding along this line. The effect of this is that oil companies operating in Nigeria will begin to migrate from only exporting crude and begin to look at how to start refining crude so that we will be able to meet our local consumption.

“With this new refinery and along with other things, what we are going to do with the refinery in Port Harcourt gives us hope in our quest to try and increase our local capacity to produce the refined products we need in the country and to meet the timeline of 2019.

“We are now going ahead to work out the modalities with Agip. I am also calling on other multinationals to see what they can do along this line.

“In the area of power, Agip has the second largest plant which will be on stream by 2020. This is to make sure they are not only just taking away crude but have other local investments.
“Total investments in the area of power and the refinery from Agip will be in excess of $15 billion,” Kachikwu said.

http://www.energywatchng.com/fg-agip-build-15bn-refinery-power-plant-niger-delta/

I WISH THEY START AND COMPLET IT. I AM TIRED OF HEARING "WILL, TO, SHALL". THE NUMBER OF MOU POLITICIANS HAVE SIGN IN THIS COUNTRY IS MORE THAN ONE BILLION.

You won't see enemies of Nigeria here

They are unpatriotic citizens

They support Igbos, Bh and NDA just for their hatred for Mr president

Lovely

Is time for south south to take wat belong to them by force

sarrki:
You won't see enemies of Nigeria here

They are unpatriotic citizens

They support Igbos, Bh and NDA just for their hatred for Mr president

U afonjas with una hatred

Enemies of south south

Let's wait and see where dangote will get the crude oil for his plants

Kachikwu is d best thing DAT has happened to Nigeria

Ok

sarrki:
You won't see enemies of Nigeria here

They are unpatriotic citizens

They support Igbos, Bh and NDA just for their hatred for Mr president

Shhh. Don't you conspicuously go missing on vital threads?
Keep on stalking imaginary enemies of state.

ephi123:


Shhh. Don't you conspicuously go missing on vital threads?
Keep on stalking imaginary enemies of state.

He is among the enemies Emir of kano they talk about

IgboAmakaa:


He is among the enemies Emir of kano they talk about

ephi123:

See scam, sha. Typical inflated contracts. In what universe does a small 150,000 bpd refinery and probably a small associated power project cost $15 billion?

I just hope this is true, we support such developmental strides.
Have you noticed that Nigerian leaders rarely engage in long term project, they always want to start and finish project to claim achievement in things that is or no or less benefit to the masses.
The America we see today is a project that started a long time ago and is in continuum. That's how industrialization began.

Obi1kenobi:
See scam, sha. Typical inflated contracts. In what universe does a small 150,000 bpd refinery and probably a small associated power project cost $15 billion?

No problems if u don't believe it

Joenyam:
I just hope this is true, we support such developmental strides.
Have you noticed that Nigerian leaders rarely engage in long term project, they always want to start and finish project to claim achievement in things that is or no or less benefit to the masses.
The America we see today is a project that started a long time ago and is in continuum. That's how industrialization began.

As long as politics is played with the projects, it will continue no matter how substandard it is.

sarrki:
You won't see enemies of Nigeria here

They are unpatriotic citizens

They support Igbos, Bh and NDA just for their hatred for Mr president

STFU and stop sounding like a broken record here!

If they look for anyone that's unpatriotic, you top the list with your half-arse, bigotic and unintelligent comments littering the cyberspace. Always fighting imaginary enemies...

Obi1kenobi:
See scam, sha. Typical inflated contracts. In what universe does a small 150,000 bpd refinery and probably a small associated power project cost $15 billion?

They said "power plant and other things".

It's to know what other things they are talking about.

STFU and stop sounding like a broken record here!

If they look for anyone that's unpatriotic, you top the list with your half-arse, bigotic and unintelligent comments littering the cyberspace. Always fighting imaginary enemies...[/quote]

I hate seeing money figures being written in dollars. Pls be writing it in Naira.
So how much is $15bn in Naira?

Amarabae:
I hate seeing money figures being written in dollars. Pls be writing it in Naira.
So how much is $15bn in Naira?

X the current exchange rate as at the time of implementing.

God bless the south south.

Amarabae:
I hate seeing money figures being written in dollars. Pls be writing it in Naira.
So how much is $15bn in Naira?

you go fear fear when u see am na!!!

Damage control..give NIGERDELTA resource control not refinery.

SIRmanjar:
Damage control..give NIGERDELTA resource control not refinery.

is ok too

Obi1kenobi:
See scam, sha. Typical inflated contracts. In what universe does a small 150,000 bpd refinery and probably a small associated power project cost $15 billion?

hmmm
Did you hear it from kachuku mouth? Always reading side of news.
Kachuku simply said agip investment is more than $15b.

ephi123:


Shhh. Don't you conspicuously go missing on vital threads?
Keep on stalking imaginary enemies of state.

e pain wella come enter an like pepper for killishi

vedaxcool:


e pain wella come enter an like pepper for killishi

Who was talking to this one? Did you miss your way? Hehehe. See this joker. You obviously need an eye check asap, kukuma follow your master to London for medical checkup zzzzombie

Empty headed zombie defending his fellow broken record zombie

[s]

ephi123:


Who was talking to this one? Did you miss your way? Hehehe. See this joker. You obviously need an eye check asap, kukuma follow your master to London for medical checkup zzzzombie

Empty headed zombie defending his fellow broken record zombie

[/s]

Sings Its like she gonna cry... oh why? ... She hasn't eaten in days...

^^ unity beggar on duty, knock yourself out quoting me all about.

vedaxcool:
[s][/s]

Sings Its like she gonna cry... oh why? ... She hasn't eaten in days...

Her name don enter Guinness world book of records for crying.
The thing be say, no mata how she cry, cleaner for aso rock no go ever near am.
Any time wey i see her for nairaland, na just cry cry go full every where. Baba, people dey sufer oh. If you want to see lamentation, just stroll enter nairaland, you go see dem yakpa everywhere crying seriously.

ephi123:
^^ unity beggar on duty, knock yourself out quoting me all about.

Cry well well.

I think they should not bother to repair any refinery. we have been hearing every time that the refinery have been repaired and ready to work in full capacity. and yet nothing is working over there. they should forget about anymore repair it seems evil forces is sitting on that refinery.


they may go ahead in building new one. we are already tired.

today they want to privatize the refinery tomorrow they want to repairs. Nigeria government is confused.

3 SEPTEMBER 2015

3 SEPTEMBER 2015
By Ernest Chinwo and Carl Chineme Okafor
Port Harcourt and Abuja — The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Emmanuel Ibe Kachikwu, has said Nigeria has saved over $287 million from the turnaround maintenance (TAM) of the Port Harcourt Refinery, Eleme.
Kachikwu made the disclosure shortly after an inspection tour of the refinery ON Wednesday.
He said foreign companies had requested to carry out the TAM at a cost of $297 million but the NNPC used its manpower and local oil servicing firms to achieve the maintenance at the cost of less than $10 million.

He said: "The asking price by the original refinery builder was $297 million. The disaster with that was that they were not professionals and they were not ready to give us guarantees. What we have done so far is under $10 million.

"Obviously, had we consistently done this overtime, we would not have the sort of nightmare that we have had today. Whatever it takes, we are going to raise money; we are going to raise some vessels to give them what they need to run this place and run it efficiently."
He said he was not ready to apportion blames for the failure to carry out TAM on the refinery for 25 years, but stressed that he was looking forward to getting solution for the nation's oil industry.

He expressed the desire of the federal government to ensure that the nation's refineries operate at their optimum capacity, insisting that the nation would continue to import refined products as the refineries cannot meet local demand even if they work at their installed capacities.

"We said that we like to tie the delivery of crude to the refinery to make sure the FCC (Fluid Catalytic Cracking) Unit work, otherwise, we will be wasting very vital resource. Kaduna like you know came up and we had a little bit of hiccups yesterday, but it is still being worked on and it should come back on stream quickly. Port Harcourt is getting ready to get their FCC powered.

"We've got to realise that these are refineries that have not been given serious maintenance for over 15 to 18 years and what I saw today was quite amazing with a lot of energy from people who are locally based here doing their best to find an alternative solution.

"Otherwise, there would have been a very long gestation period in ordering parts for these refineries. What is important is that people are motivated and energised; they are focussed. They understand my timelines that we need to get these things to work; we need to support them whichever way we can.

"I am impressed with the energy and the effort that is going on there; I am impressed with the momentum. I think that if we continue on this part, we should see the refineries working near full blast very soon. Until then, we are going to manage our resources, how we deliver crude and what we need to do in terms of reducing contractual times to enable them get the parts they need to get the refineries working. I am happy with what I saw today; we still have some ways to go, but we are on the right part," he said.

On the timeline for the refineries to go full blast, Kachikwu said: "From what I see, within the next 60 days, we should at least get two out of the three FCCs working. There are still some components that need to be tinkered with here and there and there would be stoppages while you are doing that? Certainly.

"But in a full capacity, they will be doing something like 16 million to 20 million litres of PMS. Our national consumption is within the range of between 30 million and 40 million litres; still to be determined. In their 40 per cent to 50 per cent capacity, we are probably looking at half of that. So, we will always continue to import some element of that.

"If we continue on this chain and if I can get them every month to have incremental values; we get at six, then we get at eight, then we get at 10, and set ourselves a 90-day spectrum to see where we are, that will be progress. Anything that I produce locally and don't have to import is a plus."

He ruled out any plan by the federal government to sell off the refineries, stating that instead, government might consider joint ventures.
"There will never be a plan to sell the refineries. There might be a plan to have joint venture investors, but that is going to depend on how the refineries are going to work on their own. Obviously, we are going to be looking at all options to make the refineries 100 per cent efficient," he said.

In terms of crude supply, he said: "You know we have cancelled the crude supply by vessel contracts. We are going to use some stop-gap measures to use our own internal supplies from now till when the new contracts are looked at.
"The intent is to have the pipelines work. I am very focused on the pipelines; it is no longer good enough excuse that people are sabotaging the pipelines. We have got to deal with those sabotages and we are going to go extremely tough on this.

"If we can make the pipelines work, we get crude supply and get higher volumes easier. We are on the verge of bringing in army corps of engineers to help with pipeline protection. We should be looking at both aerial surveys by helicopters, surveys by the military and obviously naval surveys as long as we can.

"But we have to also engage the communities because at the end of the day, how all these we have planned are going to be functional will depend on how well we relate with the communities. Should the pipelines work, there is no alternative to it."

On Warri Refinery that is shut down, Kachikwu said: "When you have a 30-year-old car, you are going to continue to shut it and repair and make it work. It is shut down, we are going to repair it and it is going to come back on stream. At some point, investments would be required to put in a sort of change processes.

"What our engineers are doing locally is fabricating as much as they can the replacement tools. We are working on it and the encouraging thing is not whether it is shut down; it is whether our guys are ready to get it up.

"On whether we can meet all our local production needs, probably not until we begin to put new refineries in place in addition to what we have. But if I can get them to near 100 per cent capacity for each of them, I would have taken away 50 per cent of the importation dynamics in this country. And that is what the focus should be.

"So, I am as frustrated as Nigerians are in terms of up, down, get up and shut down and all that stuff. This is the price you pay when you do not invest in turnarounds for so long a time."
He however said he would not allow scarcity of petroleum products in the country.

"I will import as much as I need. I will try and refine as much as I can and I will keep looking at those comparative dynamics and see where I land. I certainly would hope that someday in my tenure, we would stop importing. But it is not going to happen on a 100 per cent basis unless you build new refineries," he said.

Kachikwu further disclosed his intention to break into three the corporation's subsidiary, the Pipelines and Product Marketing Company (PPMC), in continuation of the ongoing restructuring exercise.

NNPC in a statement from its Group General Manager Public Affairs, Ohi Alegbe, in Abuja stated that the move is part of a bid to ensure lean, efficient and profitable operations at the corporation.

The statement quoted Kachikwu to have made this disclosure during his official tour of the Okrika Jetty and the Port Harcourt Refining Company Limited (PHRC). Kachikwu, the statement explained, noted that the PPMC would be split into a pipelines company that would focus primarily on the maintenance of the over 5,000 kilometres pipelines of the corporation, a storage company that would maintain all the over 23 depots and a products marketing company that would market and sell petroleum products.

He said that the move would ensure that the right set of skills are rightly positioned and the number of leakages in terms of pipelines break and products loss are reduced to the barest minimum.

Copyright © 2015 This Day. All rights reserved. Distributed by AllAfrica Global Media ( allAfrica.com ). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals , representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us .
http://allafrica.com/stories/201509031132.html

IgboAmakaa:
Lovely

Is time for south south to take wat belong to them by force

what belongs to south south? and what are they taking by force?, is south south not part of nigeria?,
this is how racism starts! i smell tribalism in your comment.