Nigeria: Labour halts refineries sell-off

New initiatives
Interestingly, despite the perceived inclement investment climate in the oil and gas sector, some local firms have decided to take the bull by the horns by investing in local refineries.

Last September, the Dangote Group announced plans to build a $9bn mega refinery/petrochemical/fertiliser complex in the country. A consortium of both local and foreign banks are funding the project, which will engage up to 25,000 people over a four-year construction period and will create about 3,500 permanent jobs when completed.

The proposed refinery, which would be Nigeria’s first private refinery as well as Africa’s largest petroleum refinery, has the capacity to refine 400,000 bpd of crude oil.

The petrochemical plant is expected to produce 600,000 metric tonnes per year of polypropylene and 625,000 metric tonnes per year of slurry/raw material for carbon black. The company also envisages that the proposed fertiliser plants with a capacity for 2.75 metric tonnes per year of ammonia and urea, will meet local demand and generate surplus for export.

Dangote said: “At the completion of these projects, we expect Nigeria to become not only self-sufficient in fertiliser and refined petroleum products but indeed to become recognised as a leading exporter of these products.”

Given the efforts local companies such as the Dangote Group are making to invest in refineries, there is reason to believe that government may roll out incentives to encourage new investors in the refining business, just as it did for the nation’s electricity body, the Power Holding Company of Nigeria Plc (PHCN), which it privatised last year. But until then, Nigerians can only hope that government would get the planned privatisation of the refineries right this time.