Connect with us

Business

Nigerian Refiners Pursue Afreximbank Financing Amid $18bn Funding Plan

Published

on

Iran oil

Investors in Nigeria’s modular refineries are actively engaging with the African Export-Import Bank (Afreximbank) to secure a portion of the $18 billion fund earmarked by the bank for the development of refineries in Nigeria and other African nations.

This initiative follows the successful financial backing provided by Afreximbank to the $19 billion Dangote Petroleum Refinery, which has commenced production of refined petroleum products for both domestic use and export.

Sources within the modular refining sector confirmed that discussions are underway, with significant interest from Clairgold Refinery and Shinjin Petro Chemicals.

Both companies have initiated talks with Afreximbank officials to source funds for their refinery projects in Nigeria.

However, the modular refinery operators have expressed concerns regarding the feedstock supply for their plants, which is a critical guarantee required by financial institutions for funding.

The operators, represented by the Crude Oil Refinery Owners Association of Nigeria (CORAN), praised Afreximbank’s support for the Dangote Petroleum Refinery during its construction phase.

“We are in active discussions with Afreximbank, although no modular refinery has received financing from the bank yet,” said Eche Idoko, Publicity Secretary of CORAN. “Shinjin Petro Chemicals, which is constructing a 3,000 barrels per day plant, and Clairgold Modular Refineries are among those in talks with Afreximbank and the Bank of Industry. We are hopeful for positive outcomes.”

Afreximbank’s commitment to supporting refinery construction was reiterated at the 2024 Afreximbank annual meetings in Nassau, The Bahamas.

The bank’s president, Benedict Oramah, highlighted the strategic objective to refine 50% of Africa’s crude oil production within the continent.

Oramah emphasized the bank’s role in the successful financing of the Dangote refinery as a model for future projects.

“We are proud to be associated with these transformational projects, which demonstrate the critical role of African capital in financing our development,” Oramah stated. “Our broader strategy includes supporting the construction of a new refinery in Cabinda, Angola, and refurbishing the Port Harcourt refinery in Nigeria. Our goal is to ensure that at least 50% of the crude oil produced in the Gulf of Guinea is refined in Africa.”

Despite the optimism, modular refinery operators have identified several challenges in accessing these funds.

These include securing guarantees related to feedstock supply and completing necessary engineering designs.

“The issue of feedstock remains a significant hurdle, as financiers require assurances on this front,” Idoko noted. “We are optimistic that Afreximbank will address these concerns given their recent declaration to support modular refineries.”

The ongoing discussions come at a time when Nigeria is grappling with its highest inflation rate in 28 years, driven largely by food costs.

The economic strain is exacerbating poverty and reducing the purchasing power of the nation’s 231 million residents, 60% of whom are classified as multidimensionally poor.

Modular refineries, which require significantly less capital investment compared to traditional full-scale refineries, are seen as a viable solution to boost local refining capacity and reduce dependence on imported refined petroleum products.

However, the operators have raised alarms about systemic issues within the oil sector that impede in-country refining, echoing concerns voiced by Aliko Dangote regarding the influence of entrenched interests.

As negotiations with Afreximbank continue, the modular refinery operators remain cautiously optimistic, hoping that the bank’s support will pave the way for enhanced domestic refining capabilities and contribute to Nigeria’s economic resilience.

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.

Continue Reading
Comments

Company News

Goya Foods Takes Legal Action to Assert ‘Goya Olive Oil’ Trademark Ownership

Published

on

Goya Foods

“Goya Olive Oil” trademark in Nigeria, Goya Foods Incorporated has initiated legal proceedings against the Registrar of Trademarks under the Federal Ministry of Trade and Investment.

The case, numbered FHC/ABJ/CS/883/2023, was brought before the Federal High Court in Abuja.

Goya Foods, a prominent producer and distributor of foods and beverages across the United States, Spanish-speaking countries, and Nigeria, seeks to enforce a longstanding consent judgment issued by the court in December 2006.

The judgment directed the Registrar to rectify the Trademarks Register to reflect Goya Foods Incorporated as the rightful owner of the “Goya Olive Oil” trademark, without any further formalities.

The lawsuit, exclusively revealed to sources, underscores Goya Foods’ determination to safeguard its intellectual property against alleged infringements.

According to court documents, Goya Foods obtained the consent judgment against Chikason Industries Limited, which was accused of marketing “Goya Olive Oil” in Nigeria, thus infringing on Goya Foods’ registered trademark.

Legal counsel for Goya Foods, Ade Adedeji, SAN, emphasized the necessity of rectifying the Trademarks Register to protect their trademark interests effectively.

Despite appeals to the Registrar, the requested rectification has not been implemented, prompting Goya Foods to escalate the matter through legal channels.

The case has been adjourned to September 27, 2024, for further proceedings, highlighting the complexity and significance of trademark disputes in the global marketplace.

Goya Foods remains committed to upholding its brand integrity and securing its proprietary interests amidst the evolving landscape of international trademark law.

Continue Reading

Company News

IOCs Accused of Blocking Direct Crude Sales to Dangote Refinery

Published

on

Dangote Refinery

Dangote Industries Limited (DIL) has accused International Oil Companies (IOCs) of obstructing direct crude oil sales to its refinery and forcing the company to use costly middlemen.

This development comes after a statement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) suggested a “willing buyer-willing seller” dynamic was in place as mandated by the Petroleum Industry Act (PIA).

Devakumar Edwin, Vice President of DIL, countered NUPRC CEO Gbenga Komolafe’s claims, stating that IOCs consistently make it difficult for local refiners by pushing sales through international trading arms, which inflate prices and bypass Nigerian laws.

“These middlemen earn unjustified margins on crude produced and consumed within Nigeria,” Edwin stated.

He noted that only one local producer, Sapetro, has sold directly to DIL, while others insist on using trading arms abroad.

Edwin detailed the financial impact, citing instances where DIL was charged a $2-$4 premium per barrel above the official price.

In April, DIL paid $96.23 per barrel for Bonga crude, which included significant premiums, compared to a much lower premium for West Texas Intermediate (WTI) crude.

While acknowledging NUPRC’s support in resolving some supply issues, Edwin urged the regulatory body to revisit pricing policies to ensure fair market practices.

“Market liquidity is essential for fair pricing. We hope NUPRC addresses these issues to prevent price gouging,” he stated.

This dispute highlights ongoing challenges in Nigeria’s oil sector, where domestic refiners struggle to secure local crude amidst complex market dynamics.

The outcome of these negotiations could significantly impact the refinery’s operations and broader industry practices.

The situation underscores the need for transparent and efficient crude supply systems to bolster Nigeria’s refining capacity and economic growth.

Continue Reading

Company News

Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

Published

on

Petrol - Investors King

Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending