The Buhari Government has approved the implementation of a new commercial model targeted at attracting investors in the restoration of the nation’s three refineries.
Mr Anibor Kragha, Chief Operating Officer (COO) Refineries, Nigerian National Petroleum Corporation, NNPC, said this on Wednesday in Abuja at a plenary at the ongoing 2017 Nigeria Oil and Gas Conference and Exhibition (NOG).
The plenary was on ‘Harnessing the Opportunities in Nigeria’s Downstream Sector’.
Kragha said under the new model, President Muhammadu Buhari also approved the engagement of strategic investors.
“As a result of what is happening and the global trend, President Muhammadu Buhari gave approval for strategic investments to be made in the refineries.
“So the investment model is basically this way, strategic investors who can bring refining expertise and funding will partner with local partners who have downstream experience to actually go into the refineries.
“They invest money and within 24 months get us to 90 per cent capacity utilisation,’’ he said.
Kragha, however, said within the new model, investors would be repaid from incremental production of the refineries on prior agreed terms.
To meet the deadline, Kragha said: “I need to first draw on funds latest by July, which is the only way we can meet the 24-month timeline.
“What we are doing now is that in parallel, we are doing evaluation of the technical stuff and we are going to engage financial advisers to start building a model.
“I will like to reiterate that there is no mandate to sell any equity in the refineries; we are not selling anything.
“This is just a strategic investment for a defined period, after which they recover their capital negotiated with term and that will help us ramp up very quickly in the next 24 months.’’
He disclosed that the corporation had met with the original builders of the Kaduna and Port Harcourt refineries who because of their consistence, could get parts and pricing at better rates for the corporation.
The Warri, Port Harcourt and Kaduna refineries, which even with combined efforts, cannot meet the nation’s demand for petroleum products, have for years operated below their capacities.
Other panelists at the event were former Managing Director of Kaduna and Port Harcourt refineries, Alexander Ogedengbe; NNPC’s COO Downstream, Henry Ikem-Obih, and President Nigeria Liquefied Petroleum Gas Association, Dayo Adeshina.