Why we can’t build refinery in Nigeria-Shell
On March 2, 2012 · In News 3:00 pmTweet

Mr Malcolm Brinded, the outgoing Executive Director of Shell Petroleum Development Company (SPDC), says the company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Brinded, who is in-charge of the Upstream International unit of the company, made the statement in an interview with the State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell chief in Nigeria, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world.

“With respect to downstream, two comments there. Shell is divesting from refineries all over the world because there is a surplus of refineries; we no longer own any refineries even in the United Kingdom.

“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss.

“Which also means one can get refined products back again and pay very little for it to be refined,’’ he said.

Brinded said that building refineries was no longer profitable and that informed the company’s decision to invest in the gas sector.

According to him, Shell would continue to invest in the development of the gas sector, adding: “I do believe that investment in the downstream sector, especially gas sector in Nigeria, as I touched on, is very important.

“Nigeria has huge resources of gas that have yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.

“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.’’

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http://www.vanguardngr.com/2012/03/why-we-cant-build-refinery-in-nigeria-shell/

I find his excuse very funny. While other countries were busy investing in refineries, our past govt were secretly cripling our own and building their own personal refineries.
His excuse here also goes to show that the Gej Govt didn't inquire from the oil companies directly before coming out to tell Nigerians that low cost of petroleum product is the main reason for investors not building refinies in the country.
The reason companies like shell will not build refineries is the profit they get from oil exploration and production. With the 43%:57% sharing formula they are into with the Nigerian govt, they make far too much profit, and will never be interested in refining crude oil in Nigeria.
We really need to re-negotiate so many things in Nigeria.

Laaaaaaaaaaaame!

Fresh Air

The first issue let make the one we have run to their capacity then ,

Interesting. Makes sense.

So what do we do?? We should stick to the program I guess.

Fresh air indeed!!

However, it then makes me wonder what China is getting out of these refineries it wants to build in Nigeria.

Perhaps we shouldn't build power plants, factories and anything of that sort, because other countries have a surplus of those. No schools, no hospitals, afterall we can always rely on the benevolence other countries for everything.
Since when do we need advice from an organization concerned with only with making profit. It is like Unites States asking British Petroleum for advice on how to clean up an oil spill.

so because your neighbor get bore hole, you no go dig your own, ole, shell its time to leave this country

ASOROCK b:

Fresh Air

What has this got to do with fresh air?

@topic
I think these guys should be kicked out of Nigeria seriously. What a lame excuse? This is in line Europe's raw material initiative agenda which will ensure that raw materials are never refined in Africa while discouraging increase in export tax.

This was one of the reasons France insisted that Gbagbo should leave because he wanted to ensure the processing of cocoa in Ivory Coast.

Having said that, they will not succeed without collaborators. These are the people who have stifled the passage of the PIB.
Occupy shell and national assembly.

refinary wil not benefit shell, but it wil benefit nigeria. Let dem leave our land if dey can't give back 2 nigeria full stop, case closed.

[size=13pt] during the fuel protest, this is what i warned against but bigotry has blinded most people that did not protest.

Where are thos Ideeiots that said deregulation would make refinaries for Nigeria.

Have I not warned times without number that NO MULTINATION WOULD BUILD A REFINAERY FOR NIGERIA.

Now what does nigeria do ? pass the fruastration on the people

Ideeiots listen,

- GEJ should build Nigerian owned refinary,

- reduce the indigenous Oil companies to 3 or 4 powerful ccompanies like the way it is done in the banking sector.

- Privatetized the refinaery so those companies can pay slowly and in stages.

NO PRIVATE COMPANY OR MULTINATION WOULD BUILD A REFINARY FOR NIGERIA SINCE THEY ARE NOT AS STUUUPID AS US BACK HOME.

I for one would not do such, I would rather build it in my country and force the country to export it there for refining and import it back. That way I have made 5 times my profit compare to me building a refinary and also my country has made some as well

I have also forced them to export their jobs to my country thus providing jobs for my citizens



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Since they don't want build it, let them carry their load and leave Nigeria, Ghana must go.

Sentiment apart, in terms of bottom line the guy is 100% right. The long time implication is that it stands to benefit just the CEO, deep bottom line means huge profit and big bonus for the few 1% and less job for the rest 99%. This is what get USA into the deep mess they are today. Until government start enacting laws that force these dracula executives to look at the big picture rather than their own selfish interest at the expense of the masses.

agabaI23:

What has this got to do with fresh air?

@topic
I think these guys should be kicked out of Nigeria seriously. What a lame excuse? This is in line Europe's raw material initiative agenda which will ensure that raw materials are never refined in Africa while discouraging increase in export tax.

This was one of the reasons France insisted that Gbagbo should leave because he wanted to ensure the processing of cocoa in Ivory Coast.

Having said that, they will not succeed without collaborators. These are the people who have stifled the passage of the PIB.
Occupy shell and national assembly.

It has alot to do with fresh air because we predicted this and Nigeria is not in the position to kick anyone out

I laugh at you people, kick shell out because of what they did not build a refinary for you, Heck !  it is not shell duty to build a refinary for a country. NO WAY

If you own an oil company, would you build a refinary outside your country or in your country. profit margin is to much.

alj harem:

Where are thos Ideeiots that said deregulation would make refinaries for Nigeria.

Have I not warned times without number that NO MULTINATION WOULD BUILD A REFINAERY FOR NIGERIA.

Now what does nigeria do ? pass the fruastration on the people

Ideeiots listen,

- GEJ should build Nigerian owned refinary,

- reduce the indigenous Oil companies to 3 or 4 powerful ccompanies like the way it is done in the banking sector.

- Privatetized the refinaery so those companies can pay slowly and in stages.

NO PRIVATE COMPANY OR MULTINATION WOULD BUILD A REFINARY FOR NIGERIA SINCE THEY ARE NOT AS STUUUPID AS US BACK HOME.

I for one would not do such, I would rather build it in my country and force the country to export it there for refining and import it back. That way I have made 5 times my profit compare to me building a refinary and also my country has made some as well

I have also forced them to export their jobs to my country thus providing jobs for my citizens

Not only Shell, I think Nigeria should look closely at companies like Cargill, Archer Daniels,etc. Companies that are only interested in taking raw materials from Nigeria at dirt cheap prices without giving anything back.

If shell cannot build refinery in the africa largest producer of crude oil and where they derive good revenue from,it implies the nigeria oil sector will not develop as anticipated,and by now our legislators should commence a legislative action to compel the oil giant to build refinery or leave the country

Then the F G must not allow them to operate let those who can build operate i don't know why the are taking nigeria forgranted can they say that to brasil ?

Aigbofa:

Not only Shell, I think Nigeria should look closely at companies like Cargill, Archer Daniels,etc. Companies that are only interested in taking raw materials from Nigeria at dirt cheap prices without giving anything back.

Nigeria should be NOT BE in this position at the first place. Nigeria should be the one negiociating not begging a company to build etc

We own our resources not Shell

Let us control our resources, market price etc by building OUR OWN REFINARY AND HAVE AN INDIGENOUS OIL COMPANY that takes care of that

Shell, Chevorn, Aramco, etc are now private. Why can't we have Onado for Nigeria.

Why must foreign companies dictate our market to us rather than ourselves.

When GSM came out it was 50-100 naira per min thansk to MTN but not it is as low as 20 naira per min even with inflation thanks to GLO

Why can't we do the same for Onado for crying out loud

Nigeria is not really in the position to negiociate good deals I tell you

samguru:

If shell cannot build refinery in the africa largest producer of crude oil and where they derive good revenue from,it implies the nigeria oil sector will not develop as anticipated,and by now our legislators should commence a legislative action to compel the oil giant to build refinery or leave the country

ibide:

Then the F G must not allow them to operate let those who can build operate i don't know why the are taking nigeria forgranted can they say that to brasil ?

LOL why not take your guns and force them to build YOUR refinary for you.

Very simple! Let them go n get their oil in d worldwide located refineries.
They could as well shut down since there are other oil companies located worldwide.

Can some of you people please engage spell checker, (eg Alj Harem)

Ps: Refinery is spelt Refinery and not Refinary.

What a terible reason, but anyway I thank God it becoming obvious.

Shell Nigeria needs to be nationalized.

Pity we dont have a strongman (like a 'Castro') to show these foreign corporations who's resources these are.

Nigeria just like the rest of Africa has been earmarked to be nothing more than a supplier of raw materials to the rest of the world - thats whats keeping us in poverty.

Whether crude oil or cocoa - its the west that makes collosal profits whilst paying us a pittance.

These companies are in Nigeria to make money, which is alright. But at times , that is not always in tandem with our national interest. So, before any of the these multinationals is allowed to operate in Nigeria, the first question should be; What is in it for us? If nothing, then they should kindly take their[i] portimoto[/i] and go back to wherever they came from.

Shell should leave the crude oil if it can't build refinery. I think government should compel those multinationals to be socially responsibly. We should not wait until MEND or Boko boyz start forcing it on them.

SPDC is already nationalized. Isn't 50%+ of it owned by the Nigerian government?

Anyway, I don't see how you can force them to sink money into a business that they have no interest in.

Nigeria wants refineries. So build it yourself, rather than forcing somebody else to make it for you!

Aigbofa:

These companies are in Nigeria to make money, which is alright. But at times , that is not always in tandem with our national interest. So, before any of the these multinationals is allowed to operate in Nigeria, the first question should be; What is in it for us? If nothing, then they should kindly take their[i] portimoto[/i] and go back to wherever they came from.

This is how it should be and this is how other countries operate. That said, thanks to OBJ, Ibori et al we are where we are to day. The multinationals protect their own interests any way they can, it is up to our leaders to protect ours. Time and again, they have proven themselves incapable and unwilling to do that.

The audacity to utter such statement in Asorock, during his farewell visit, says it all. Our leaders have sold us all in exchange for fat Swiss accounts.

strangest:

so because your neighbor get bore hole, you no go dig your own,  ole, shell its time to leave this country

No long thing,simple & short as your post is,you have said the whole truth. Shell & all other kinds of extorting & imperialist foreign companies like it need to get the hell out of our country as soon as possible.

omowolewa:

Shell should leave the crude oil if it can't build refinery. I think government should compel those multinationals to be socially responsibly. We should not wait until MEND or Boko boyz start forcing it on them.

wetin concern building refinery with social responsibility? What the heck is social responsibility anyways? "Build this thing for us that we want, but are too lazy and/or incompetent to build ourselves?"

I mean, shouldn't we be embarrassed that everyone here seems to believe that the only way that there will be refineries in the country is if you ask Shell to build it for you?

Why doesn't Nigeria build refineries itself? Or hire out the task to somebody?