We Need $700m To Upgrade Refineries – FG
The Federal Government has said that it would need the sum of $700 million to upgrade the nation’s refineries to be able to perform up to 90 per cent capacity.
The Minister of State for Petroleum, Dr. Ibe Kachikwu, disclosed this on Saturday when he visited Eleme Local Government Area of River State for the re-commissioning of the crude line from Bonny to the Port Harcourt refinery.
Kachikwu explained that though Nigeria was currently not having such amount to upgrade the facilities, the country was embracing a creative way of bringing in investors.
He pointed out that such investors would work with Nigerians on the ground to reactivate and upgrade the refineries, adding that the investors would be paid through the flow-out of refined products.
The minister said, “We are not inviting foreign partners to take over the refineries; we do not have the funds. Even now that they (refineries) are working, they are probably working at about 60 per cent capacity. We need to upgrade these refineries and let them develop to the point where they can perform up to 90 per cent capacity. Total investment for that is up to $700 million and we don’t have that (money). Let us be honest about it.
“So, the best thing to do is to find a very creative way to bring in investors, who will come in, work with our team here, who have the skills, reactivate and upgrade facilities in this place and help us provide technical support and they would be paid through the flow-out of the refined products over time. There is no confusion about what they are coming to do; they are not coming to run the refinery. They are coming to provide funds to take our performance on these refineries to 90 percent and to provide us with technical skills. So, the areas of intervention will be funding and technical support.”
Kachikwu apologised to Nigerians for the challenge being faced due to scarcity of fuel.
Explaining that the Federal Government was putting measures in place to tackle the problem of fuel scarcity, Kachikwu stated that the government was not going to give up on the issue.
He observed that while the refineries were currently producing 12 million litres of Premium Motor Spirit (petrol), the nation consumed about 45 million litres a day.
Meanwhile, the Federal Government on Saturday re-commissioned the Escravos-Warri-Kaduna pipeline and announced that both Warri and Kaduna refineries were now receiving crude oil simultaneously for the first time in many years.
According to Kachikwu, the refinery in Warri has started working while Kaduna’s will start production at the end of the month.
The Group General Manager, Group Public Affairs Division, NNPC, Garba-Deen Muhammad, in a statement issued in Abuja, quoted Kachikwu as saying that for the first time in many years all the three refineries and major crude pipelines in Nigeria will be working at the same time.
The minister described the Escravos terminal as the heartbeat of the downstream sector and critical to local supply of finished petroleum products, adding that both refineries in Warri and Kaduna were majorly fed from Escravos crude stock.
Kachikwu said, “The challenge of this country is the challenge of focus and stewardship. For the first time in many years the three refineries are going to be working and it will help in a great deal with the issue of fuel supply and distribution across the country and will go a long way to manage the fuel crisis.”
He enjoined Nigerians to be more patient as the corporation was working hard to end fuel shortage across the country.
“I appreciate the patience of Nigerians and I am committed and focused to make petrol available to all nooks and crannies of Nigeria,” he said.