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Integrated Oil Seeks Govt Support for 20,000bpd Refinery

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  • Integrated Oil Seeks Govt Support for 20,000bpd Refinery

The Chairman, Integrated Oil and Gas Limited, Mr. Emmanuel Iheanacho, has stressed the need for the Federal Government to provide enabling environment for operators to ramp up the nation’s refining capacity.

He said the 20,000 barrels per day refinery being built by his company would help to reduce importation of refined petroleum products into the country.

Iheanacho, who stated this in Lagos at a briefing, said the support being sought from the government included policy framework that would encourage financial institutions to make funds available to indigenous players intending to build modular refineries.“Financial support is one major area we need government’s help, if government realises that there is a need to have a lot of the small-scale refineries to turn around the economy.”

According to him, the construction of the refinery requires an investment of over $100m.

“So we need government to assist modular refinery operators; we are not asking to be given grants and handouts but to be assisted in the process of being able to secure financing in the major finance institutions,’’ Iheanacho said.

He said the company’s $116m proposed refinery would be a reference point in Nigeria when completed.

According to him, the Tomaro refinery sited on a 90-hectare land in Amuwo-Odofin Local Council Area is expected to produce diesel, kerosene, aviation fuel, naphta and fuel oil.

He said the plant would be upgraded to produce Premium Motor Spirit, also known as petrol, as operations progressed.

Iheanacho described full deregulation of the downstream sector as the best option to attract investors.

He said the removal of all hindrances and bottlenecks in the sector was needed for the improvement of private investment and market competitiveness.

The Integrated Oil chairman said, “We should note that there is no provision of subsidy payment in the 2017 budget, which calls for government to fully deregulate the downstream sector to attract investors.

“We need full deregulation of the downstream sector. We do not need partial deregulation. I do not understand the so-called price modulation we are seeing and how it can work because presently, it is not working.

“Government should move from uncertainty to certainty. We have a situation where prices are capped on one hand. Market prices in Nigeria and international market prices are outside the control of our local policy.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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NNPC and TotalEnergies to Invest $550 Million in Rivers State Gas Facility

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The Nigerian National Petroleum Corporation (NNPC) Ltd and TotalEnergies have announced a joint investment of $550 million in a new gas processing facility in Rivers State.

The project aims to enhance gas exports and boost domestic supplies, a source within NNPC revealed on Wednesday.

The planned investment encompasses the construction of a state-of-the-art gas processing plant and an extensive pipeline network.

The facility will be situated on the Ubeta onshore gas field, which is co-owned by TotalEnergies and NNPC.

The gas processed at this facility will be supplied to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium involving NNPC, Shell, TotalEnergies, and Italy’s Eni.

Upon completion, the Ubeta gas processing plant is expected to produce 350 million standard cubic feet of gas per day, alongside 10,000 barrels of associated liquids daily.

This development comes as Nigeria seeks to capitalize on its vast natural gas reserves, estimated at over 200 trillion cubic feet, which remain largely untapped due to inadequate processing infrastructure and capital limitations.

An official announcement regarding the investment is anticipated later this week. Although TotalEnergies has declined to comment, sources close to the agreement confirm that the project reflects a renewed effort by President Bola Tinubu’s administration to attract substantial investment into Nigeria’s energy sector.

“This investment is a clear indication of confidence in Nigeria’s resource potential and the government’s commitment to improving the ease of doing business,” commented Clementine Wallop, Director for Sub-Saharan Africa at political risk consultancy Horizon Engage.

The initiative also aligns with Nigeria’s strategic goals to increase its gas exports, especially to the European Union, which has been seeking alternative energy sources in the wake of reduced imports from Russia due to the ongoing conflict in Ukraine.

Domestically, the project is expected to alleviate some of the supply issues faced by Nigeria’s gas power plants, which are crucial for the country’s electricity generation.

Energy analysts highlight that this project could signify a turning point for Nigeria’s energy landscape, offering a much-needed boost to the country’s economic stability and energy security.

As Nigeria continues to grapple with the challenges of gas flaring and underutilization of its natural gas reserves, the NNPC and TotalEnergies’ investment in the Rivers State gas facility represents a strategic step forward in addressing these longstanding issues.

The successful implementation of this project could pave the way for further investments and advancements in Nigeria’s energy sector.

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Escravos Seaport: $27.29 Billion Seaport Project in Jeopardy Amid Bureaucratic Stalemate

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Nigeria is on the brink of losing a $27.29 billion investment earmarked for the development of the Escravos Seaport Industrial Complex (ESIC) in Delta State.

The ambitious project, championed by the Mercury Maritime Concession Company (MMCC) and backed by foreign investors, is stalled due to prolonged delays in securing final governmental approvals.

Rear Admiral Andrew Okoja (rtd), the chairman of MMCC, voiced his concerns during a recent press briefing.

He emphasized the urgency of obtaining the necessary governmental consents, warning that the delay could result in the forfeiture of the crucial investment.

“EDIB International of Hong Kong has expressed readiness to inject $27.29 billion into the deep seaport project located in Escravos. However, without the required approvals from both federal and state governments, we risk losing this investment,” Okoja stated.

The ESIC project is poised to be a significant economic catalyst, promising to transform Delta State and its neighboring regions.

Modeled after the successful Lekki Deep Seaport and Free Trade Zone, the ESIC is expected to spur trade, commerce, and industry across eight states, including the Federal Capital Territory, Abuja.

“This project is not just about developing a seaport; it’s about creating an economic hub that will drive growth and development across a broad spectrum of sectors,” Okoja explained.

In a letter dated January 19, 2024, EDIB International Ltd., through its chairman Kwame Springer, reiterated its commitment to the project. The letter, addressed to MMCC, highlighted the need for a federal government guarantee to protect the investment.

“We require a guarantee from the Nigerian government to secure our investment. The time frame given to secure these approvals is three weeks, beyond which we might have to consider alternative locations for our investment,” the letter stated.

The Escravos Seaport project has seen provisional approvals from both federal and state governments in the past.

In November 2020, the Federal Government granted a provisional approval for a 50-year renewable concession agreement under the Build, Own, Operate, and Transfer (BOOT) model.

Similarly, in May 2022, the Delta State Government agreed to lease 31,000 hectares of land for the project.

Despite these provisional nods, the final approvals remain elusive.

“We have met all regulatory requirements and are ready to proceed. The delay now lies with obtaining the final consent from the government,” Okoja noted.

He urged the federal and state governments to expedite the approval process to avoid losing the investment to other African nations.

The development of the ESIC encompasses not just the construction of a seaport but also the integration of road, rail, and marine connectivity aimed at optimizing cargo flow.

The project includes the construction of the Warri-Sapele Expressway, linking it to key trade routes.

“This infrastructure will significantly reduce congestion at Lagos ports and open up new economic opportunities for the Niger Delta, Eastern, and Northern States,” Okoja highlighted.

The Escravos Seaport Industrial Complex represents a transformative opportunity for Nigeria’s economic landscape.

However, bureaucratic inertia threatens to derail this landmark project. As the clock ticks, the onus is on the federal and state governments to act swiftly and secure the future of this pivotal investment. Without immediate action, Nigeria stands to lose a monumental opportunity to boost its economy and create thousands of jobs.

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Crude Supply Concerns Stall Nigeria’s Modular Refinery Construction Projects

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The ambitious plans for constructing modular refineries across Nigeria, aimed at bolstering domestic refining capabilities, are encountering significant roadblocks due to apprehensions surrounding crude oil supply guarantees.

Despite the country’s aspirations to become self-sufficient in refining, the reluctance of international oil companies (IOCs) to commit to supplying crude to these facilities has left many projects hanging in the balance.

Presently, only a handful of the planned 20 modular refineries are operational, with the remaining projects either stalled or facing financial uncertainties.

This predicament stems from investors’ demands for assurances regarding crude oil availability before releasing funds for construction.

Eche Idoko, the publicity secretary of the Crude Oil Refinery Owners Association of Nigeria (CORAN), highlighted the pivotal role of guarantees in securing financing for refinery projects.

He emphasized that without a guarantee of feedstock, investors are understandably hesitant to proceed with funding.

Idoko further elucidated that the absence of a regulatory framework mandating IOCs to provide such assurances exacerbates the challenges faced by modular refinery operators.

Despite repeated pleas from industry stakeholders, regulatory bodies have yet to enforce provisions ensuring crude supply to indigenous refiners, adding to the uncertainty surrounding these projects.

The ramifications of this impasse extend beyond the economic realm, as Nigeria’s aspirations to emerge as a regional refining hub are jeopardized.

With the potential to significantly reduce the country’s reliance on imported petroleum products, modular refineries represent a critical component of Nigeria’s energy security strategy.

Furthermore, the synergy between modular refineries and larger-scale projects like the Dangote Petroleum Refinery could position Nigeria as a key player in West Africa’s refining landscape.

By addressing the continent’s substantial deficit in refined petroleum products, Nigeria has the opportunity to assert its leadership in the region’s energy sector.

However, unlocking the full potential of modular refineries hinges on overcoming the current challenges surrounding crude supply guarantees. With concerted efforts from regulatory bodies, IOCs, and industry stakeholders, Nigeria can navigate these obstacles and realize its vision of a vibrant and self-sustaining refining sector.

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