What looks like a healthy rivalry may soon come to play in Nigeria’s downstream oil and gas sub sector, as an indigenous oil major, Forte Oil, says it is holding talks with the Warri Refinery to form a strategic partnership for increased local output capacity.
Disclosing this on Friday, Mr Akin Akinfemiwa, Forte Oil Chief Executive Officer, said though details were still being worked out, the agreement was aimed at exploring partnerships and joint ventures for local refining of petroleum products.
He stated that the venture might be one that could prepare Forte Oil to eventually go deeply into refining of petroleum products to see if Africa’s top oil exporting country could refine products for local consumption in a few years to come.
The Warri Refinery, initially built to supply 100,000 barrels per day (bpd) output at its inception in 1978, was in 1987 upgraded to run a bigger capacity of 150,000 bpd. Further equipped in 2000, it went for 200,000 bpd, but lack of maintenance has seen it run less than 40 per cent of its full capacity since 2016.
But in May, another major oil group, Oando Plc, announced that it was having talks to work with Italian energy company, Eni, to rehabilitate the Port Harcourt refinery.
Also, Africa’s richest man Aliko Dangote is building an $17 billion oil refinery with a capacity of around 650,000 bpd, planned to start operation by 2019.
Nigeria has four refineries but still depends on importation of over 70 per cent of its petroleum products needs due to the poor condition of its refineries.
But Minister of State, Petroleum Resources, Ibe Kachikwu recently lamented how lack of cooperation of stakeholders had stalled take off of the policy of having private investors participate in the dream to have the refineries back to full capacity.
He stated that Nigeria could not afford the luxury of spending scarce resources importing fuel when the solution lies on having investors inject funds with which to refurbish the decrepit refineries.
Kachikwu further said that the old refineries were having a daily domestic refining capacity of six million litres, while the daily consumption stands at 35 million.
Forte Oil, which is largely owned by oil mogul, Femi Otedola, had its shares rise by 4.99 per cent on Friday to reach N60.37, giving it a market value of about $216 million.
It would be recalled that the firm’s shares suffered great load shedding in 2015 and 2016 financial years, having fallen to 74 per cent and 32 per cent, respectively.
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