Firms to start construction of four private refineries in Nigeria

Dec 16, 2003 01:00 AM

Four of the firms licensed to run private refineries in Nigeria will soon start construction of physical structures having satisfied the technical and funding requirements set by government. The government had issued licenses to some companies to build and run private refineries in the nation's deregulated downstream oil and gas sector.
Since then none of the licenses has made any visible attempt to begin work on their site due to a myriad of technical hitches. Sources from Department of Petroleum Resources (DPR), however, disclosed that four out of the lot have scaled the first stage of the hurdles towards eventual establishment of the refineries.

According to the source, the four companies have satisfied the government requirements on the crucial areas of financial and technical competence, clearing them for the next stage which involves construction of physical structures. DPR sources explained that the establishment of the private refineries was hampered by price regulation which the sources observed did not guarantee returns on investment.
Sources explained that running private refineries was a multi-billion naira venture and that investors would naturally require a deregulated market environment to consider the enterprise viable. Another problem that hindered early establishment of the refineries, the experts said, was non guarantee of adequate crude oil feedstock to the refineries.

But DPR said it would mount pressure on government by deliberately seeking a Presidential directive to the Nigeria National Petroleum Corporation (NNPC) to ensure adequate and regular supply of crude oil input to the private refineries at export price parity.
The DPR source expressed optimism that the four companies would soon establish private refineries now that the two problems of price regulation and crude allocation have been dismantled.

Source: Daily Champion
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