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US Investors To Build 6 Refineries In Nigeria - Business - Nairaland

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US Investors To Build 6 Refineries In Nigeria by Piddo(m): 4:40am On Jul 03, 2012
It is not yet Uhuru for Nigerians. At face value, this appears a laudable project but has anyone bothered to think how the investors will make their money back? You and I will pay for it for over many decades to come. Upon completion, the FG will ban importation of petroleum products and Nigerians will have to pay the rate dictated by the "investors" for their product. If only the FG was honest about fighting corruption, fixing the nations 4 refineries would have been best for Nigerians but now we have invited people in with billions of dollars and surely, its no charity!! Nigerians will pay dearly for it in the end.


ABUJA (AFP) – Nigeria on Monday signed a Memorandum of Understanding with an American energy firm to build six oil refineries, in a project worth 4.5 billion dollars, a government statement said.

Nigeria’s refining infrastructure has largely crumbled, turning the country into a net importer, which often pays high prices for its own crude that has been processed abroad.

The deal between US-based Vulcan Energy, the Nigerian government and a local firm, aims to build six refineries with a combined capacity of 180,000 barrels per day, Nigeria’s Trade and Investment Ministry said in a statement, which also listed the 697.5 billion naira ($4.5 billion) price tag.

Two of the refineries are to be completed within a year, according to the terms of the MoU.

“This is the beginning of changing our old paradigm from exporting just raw materials and exporting jobs to the Western countries,” Trade and Investment Minister Olusegun Aganga said in the statement.

Nigeria produces around 2 million barrels a day of crude, making it the world’s eighth largest producer, but its petroleum industry has for years been riddled with corruption and poor management.

Last week, President Goodluck Jonathan fired the chief executive of the state oil firm NNPC, a move his office said was designed to boost transparency and accountability.

Vulcan’s vice president, Jim Mansfield, said the MoU highlighted Nigeria’s attractiveness as an investment destination.

“The funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business,” he was quoted in the statement as saying.

Houston-based Vulcan currently operates in several US states as well as Canada.

Source
Re: US Investors To Build 6 Refineries In Nigeria by Afam4eva(m): 12:20pm On Jul 03, 2012
Where are they building the 6 refineries. Please they should bring one to Enugu.
Re: US Investors To Build 6 Refineries In Nigeria by Skipfr(m): 12:24pm On Jul 03, 2012
Good one sha. Hope e nor go com belike Haliburton o?
Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:25pm On Jul 03, 2012
If importation is banned and we are consuming locally, The Government of Nigeria can still subsidized based on the local rate which I feel can be controlled and wont be as much as it were now. My opininon
Re: US Investors To Build 6 Refineries In Nigeria by KINGwax(m): 12:25pm On Jul 03, 2012
Siddon there they wallow!
Na today dem papa dey sign memorandum or give licence?
Maybe if they cld sign 'memoranbila' e go work!!!
Re: US Investors To Build 6 Refineries In Nigeria by kkk17(f): 12:27pm On Jul 03, 2012
Nigeria!!!! lipsrsealed see the way corruption is dragging us down and heaping very heavy burden on the masses. People need to go to their states, local governments and wards and start holding them to ransom. When they have fallen we shall proceed to the center. The federal government will be an akamu case

2 Likes

Re: US Investors To Build 6 Refineries In Nigeria by ifihearam: 12:29pm On Jul 03, 2012
Its a welcome development by the government
Re: US Investors To Build 6 Refineries In Nigeria by tbaba1234: 12:33pm On Jul 03, 2012
Id believe it when i see it

1 Like

Re: US Investors To Build 6 Refineries In Nigeria by naylove(m): 12:35pm On Jul 03, 2012
They no go work.if they do function,then dir production output no fit pass 25% of their installed capacity at every point in time.unless no be naija.
Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:37pm On Jul 03, 2012
I am so proud of myself. I read the motives of USA the moment they planned building robust embassy structure at ABJ, naming Boko haramers as terrorists. I knew they had investment plans in Nigeria. This is one great news I have longed to hear. With Americans, and Chinese investing massively in Nigeria, the dynamics will change. I pledge to Nigeria my country, to be faithful, loyal and honest. So help me God.

7 Likes

Re: US Investors To Build 6 Refineries In Nigeria by frond: 12:37pm On Jul 03, 2012
These companies seem not genuine. How can a company with dealing of billion of dollars doesn't have website; US company for that matter. Is this not another avenue to syphon money. Let wait and see.
Re: US Investors To Build 6 Refineries In Nigeria by aminu150(m): 12:39pm On Jul 03, 2012
another dumb idea from the useles 9ja govt. Why cant we build our own refineries or allow Nigerian business men do it? Must we wait for US for everything?. Since Nigeria is a good place for investment why cant they (US) bring some of their manufacturing companies here to contribute to economic development.

6 Likes

Re: US Investors To Build 6 Refineries In Nigeria by collins123(m): 12:39pm On Jul 03, 2012
Vomits. Urggh!
Re: US Investors To Build 6 Refineries In Nigeria by likeme(m): 12:42pm On Jul 03, 2012
So Nigeria's Trade Minister, Olusegun Aganga has signed an MOU with a certain Vulcan Petroleum to build 6 new modular refineries worth $4.5 billion... & I laugh in Swahili!

Well, in the first place no western investor will commit to building a new refinery in Nigeria just now. The Chinese state companies can build refineries but they would have bargained for other things.

It's just a total mess that Aganga is working just for the sake of getting activities on & not necessarily to achieve real change. I'm sure the way Aganga is discharging his duties to Nigeria is not the same way he managed his portfolio while at Goldman Sachs!

Sadly, the same Vulcan Energy signing this refinery deal is a subsidiary of Vulcan Capital who have a history of contract breaches & controversies.

The promoters of Vulcan Energy signed a contract with Sokoto state government in 2008 to build independent power plants in 6 months. Well after the exchange of millions of dollars & 4 years down the line, the IPP project is yet to see the light of the day!

Another Vulcan Capital's subsidiary was awarded a power plant contract in Iraq in 2004 and this was also marred with accusations of bribery & lawsuits on breach of contract.

Various cases of contract breaches have been filed & won against Vulcan in the US and oddly in some instances, some of the lawyers of Vulcan have withdrawn their legal services from Vulcan due to unpaid legal bills.

Well, Mr Aganga in his wisdom deems it fit to sign a refinery deal with an investment company (not even a refinery operator) with a chequered history. The question is how many refineries do Vulcan operate in the world currently?

Meanwhile it is obvious Nigeria does NOT need new refineries at the moment when it will be more cost effective & scalable to put our current refineries to work optimally.

Recently a refinery expert in the UK, who has consulted for various government & private owned refineries, including NNPC told me that, "Nigeria does not need new refineries just now. No serious investor will build new refineries in Nigeria. What Nigeria needs to do is to ensure the existing refineries are made fully functional & effective. But that might never happen!"

So the final question is why are top refinery operators in the world & major international oil companies not building refineries in Nigeria? Why is Aganga signing an MOU with "a certain" Vulcan Energy all in the bid to show that government is doing something? Well, do the maths! ...Tope

8 Likes

Re: US Investors To Build 6 Refineries In Nigeria by Ohislee(m): 12:42pm On Jul 03, 2012
Abeg make them build one 4 benin....... grin
Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:43pm On Jul 03, 2012
frond: These companies seem not genuine. How can a company with dealing of billion of dollars doesn't have website; US company for that matter. Is this not another avenue to syphon money. Let wait and see.
Its called Foreign Direct Investment (FDI) in business, the Nigerian company is there because there must be local partnership and the Feds is there cos it has to influence price regime to be favorable to Nigerians, the Money from FDI comes from the 3 parties, the Foreigners bring the technical know-how as well as some financial obligations. I am responding to you because you showed genuine ignorance, now that you are educated on this, please tell your neighbor.
Re: US Investors To Build 6 Refineries In Nigeria by cecegorz(m): 12:44pm On Jul 03, 2012
why give an American company the right to build (6) whopping Refineries Why not 2? And then give other companies room to build too, at least to engender healthy competition.
This sounds like a whole sale of the petrol economy to these Uncle Sam's reps if it ever comes to fruition.
Besides $4.5b is not that much that we can't pull some funds from the foreign reserves and execute this ourselves.
So, when will our own indigenous refineries start producing?
Re: US Investors To Build 6 Refineries In Nigeria by uzomagic(m): 12:44pm On Jul 03, 2012
The establishment of 6 refineries is surely a right step in the right direction. The Federal govt's reforms are paying off and with the continued prayers, goodwill and support, more progress will be made. This administration may have it's critics and detractors but what is fairly evident that GEJ wants the best for this Contry. The challenges notwithstanding, it is in the interest of all Nigerians, including Boko Haram and their sponsors that this Country must move forward. We can, We will, We must
Re: US Investors To Build 6 Refineries In Nigeria by alaoeri: 12:45pm On Jul 03, 2012
Story story, na today only signing ωε dey hear no execution of the project.
Re: US Investors To Build 6 Refineries In Nigeria by johnnyemman: 12:45pm On Jul 03, 2012
How can you sign such a contract with a company that does not have a website?..........Nigeria we keep fooling ourselves, this is another way of taking funds out of Nigeria, OBJ did the same with a chiness comapny abt rail road. How can you sign 4.5 Billion dollar with a company that does not have a website.

1 Like

Re: US Investors To Build 6 Refineries In Nigeria by maclatunji: 12:46pm On Jul 03, 2012
tbaba1234: Id believe it when i see it

It is a lie! You mean you can post outside our section? tongue grin
Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:46pm On Jul 03, 2012
cecegorz: why give an American company the right to build (6) whopping Refineries Why not 2? And then give other companies room to build too, at least to engender healthy competition.
This sounds like a whole sale of the petrol economy to these Uncle Sam's reps if it ever comes to fruition.
Besides $4.5b is not that much that we can't pull some funds from the foreign reserves and execute this ourselves.
So, when will our own indigenous refineries start producing?
Do you truly know the meaning of "Uncle Sam" ? lol.
Re: US Investors To Build 6 Refineries In Nigeria by maclatunji: 12:48pm On Jul 03, 2012
Why do Americans love to embrace ancient paganism? Vulcan?
Re: US Investors To Build 6 Refineries In Nigeria by ismhab(m): 12:49pm On Jul 03, 2012
Fresh Air.
Re: US Investors To Build 6 Refineries In Nigeria by TrueNaijaguy: 12:49pm On Jul 03, 2012
Piddo: It is not yet Uhuru for Nigerians. At face value, this appears a laudable project but has anyone bothered to think how the investors will make their money back? You and I will pay for it for over many decades to come. Upon completion, the FG will ban importation of petroleum products and Nigerians will have to pay the rate dictated by the "investors" for their product. If only the FG was honest about fighting corruption, fixing the nations 4 refineries would have been best for Nigerians but now we have invited people in with billions of dollars and surely, its no charity!! Nigerians will pay dearly for it in the end.




Source

You see what I'm saying? Some people don't see anything good about the government no matter how laudable they look. Who said its charity? Obviously investors will make profit on investment. Its left for us to utilise it in such a way that we enjoy the benefits. Do u still want Nigeria to be importing petroleum products from abroad? Are you not in support of local manufacturing of products? Are you not aware that the repair of our existing refineries will commence in Octocer? Is there anything wrong in having more refineries so we can even be exporting finished products? Have you seen part of the deal which suggest that we are being cheated or are you just criticising this project to gain cheap popularity like your master Elrufai? Please be realistic and stop making unreasonable statements.

1 Like

Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:51pm On Jul 03, 2012
johnnyemman: How can you sign such a contract with a company that does not have a website?..........Nigeria we keep fooling ourselves, this is another way of taking funds out of Nigeria, OBJ did the same with a chiness comapny abt rail road. How can you sign 4.5 Billion dollar with a company that does not have a website.

I think this investment might be coming from the US government reps via a venture capital firm, the website http://www.vulcancapital.com This kind of massive investment is something that Obama may have put pen on paper especially when there was a warning to citizens about safety in Nigeria. I feel its government move.
Re: US Investors To Build 6 Refineries In Nigeria by kaiter: 12:52pm On Jul 03, 2012
see the way corruption is dragging us down and heaping very heavy burden on the masses. People need to go to their states, local governments and wards and start holding them to ransom. [img]http://www.demama.info/g.gif[/img]
Re: US Investors To Build 6 Refineries In Nigeria by Nobody: 12:53pm On Jul 03, 2012
johnnyemman: How can you sign such a contract with a company that does not have a website?..........Nigeria we keep fooling ourselves, this is another way of taking funds out of Nigeria, OBJ did the same with a chiness comapny abt rail road. How can you sign 4.5 Billion dollar with a company that does not have a website.

Its even on Bloomberg website, wow, its real deal.

http://www.bloomberg.com/news/2012-01-30/vulcan-energy-plans-to-invest-620-billion-naira-in-nigeria-1-.html
Re: US Investors To Build 6 Refineries In Nigeria by coolzeal(m): 12:54pm On Jul 03, 2012
Well, what do you think the Americans are doing lol, they are fighting with China over Africa resources plus their economy is bad now and with all the debt crisis happening in Europe. The earlier we realize that we don't need the western world the early the better because if there's no Africa and its resources then there's no America and Europe and our leaders need start thinking about the people not themselves.. Hope this is not another fake investment or white elephant project haha..
Re: US Investors To Build 6 Refineries In Nigeria by Kx: 12:57pm On Jul 03, 2012
uzomagic: The establishment of 6 refineries is surely a right step in the right direction. T

When were the 6 refs established?
Is signing an "mou to build" same as establishing?

1 Like

Re: US Investors To Build 6 Refineries In Nigeria by Beaf1: 12:57pm On Jul 03, 2012
So people are still interested in investing in Nigeria.
Re: US Investors To Build 6 Refineries In Nigeria by frond: 12:57pm On Jul 03, 2012
Billyonaire: Its called Foreign Direct Investment (FDI) in business, the Nigerian company is there because there must be local partnership and the Feds is there cos it has to influence price regime to be favorable to Nigerians, the Money from FDI comes from the 3 parties, the Foreigners bring the technical know-how as well as some financial obligations. I am responding to you because you showed genuine ignorance, now that you are educated on this, please tell your neighbor.

FDI should be brought by investor with a genuine registered company. FDI business to Nigeria should not be exception. The technical knowledge you are talking about should either come from a consultant company or experienced company in the field. Because of the magnitude of this amount, this company, either in Nigeria or otherwise should be known internationally . How can a reputable company either in Africa or in any other countries would not have website . This can't be true.

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