A Memorandum of Understanding between Italian oil giant ENI and Nigerian National Petroleum Corporation was signed in Rome yesterday with ENI committing to the refurbishment of the Port Harcourt Refinery.
The company also agreed to build Phase 2 of Okpai Power Plant and to further invest in Nigeria’s Oil and Gas industry.
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, who witnessed the signing of the MoU urged International Oil Companies (IOCs) to invest in building refineries in Nigeria.
Nigeria’s oil industry is facing a lot of challenges with government-owned refineries not functioning optimally and militants in the oil producing Niger Delta region destroying facilities.
Kachikwu, currently in Rome, is slated to meet the Ministers of Foreign Affairs and Economic Development of Italy to formalise the cooperation between Oil Majors and Nigeria and meet with 10 other IOCs to further expand the partners of investments in Nigeria’s Oil and Gas sector.
Kachikwu made a presentation to top Executives of ENI, an IOC, the Director of Press in the Ministry, said in a statement released in Abuja on Monday.
The minister urged the ENI group to move beyond just the business of crude exploration to firmly supporting the vision of enhancing local production of petroleum products in Nigeria through the building refineries.
He said the major plan of the Federal Government was to stop importation of petroleum products in the long term.
“It would be expedient that every IOC should invest in building a refinery with a chain of distributions,” Kachikwu said.
He reiterated the need for the building of refineries and power plants to drive Nigeria’s economy.
The minister said that the refineries could be built by IOCs, and within a short period of time, investment in the venture could be recouped by direct sales model.
He gave a historical background of the nation and challenges of the oil sector.
Kachikwu said that the refineries were built in the 1970s and 1980s and were currently working at sub-optimal levels and hence could not cater to local needs.
The minister said Nigeria was dependent on product importation but the present administration had promised to correct this anomaly by upgrading old refineries and building new ones.
“This will increase local production capacity with an objective to reduce importation of petroleum products by 60 per cent in 2018, and by 2019 become a net exporter of petroleum products and value added petrochemicals,” he said.
In 2015, the Muhammadu Buhari administration, said it would sell off refineries which were underperforming.