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Nigeria to sell four state-owned refineries in 2014

11.18.2013  | 

An audit recommended their sale due to inadequate government funding and “sub-optimal performance.” The refineries, which have a capacity of 445,000 bpd, should be privatized within 18 months.


Nigeria, Africa’s largest oil producer, plans to begin privatizing its four state-owned oil refineries before the end of the first quarter, Petroleum Minister Diezani Alison-Madueke said.

“We would like to see major infrastructural entities, such as refineries, moving out of government hands into the private sector,” Ms. Alison-Madueke said in an interview with Bloomberg TV Africa in London. “Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over all these years.”

A presidential audit of the facilities last year recommended their sale due to inadequate government funding and “sub-optimal performance.” The refineries, which have a combined capacity of 445,000 bpd, should be privatized within 18 months, according to the report submitted to President Goodluck Jonathan in November 2012. Nigeria, a member of the Organization of Petroleum Exporting Countries, produced 1.99 million bpd of crude in October, data compiled by Bloomberg show.

While Nigeria is also Africa’s top crude exporter and the most populous with more than 160 million people, it relies on fuel imports to meet more than 70% of its needs. Its state-owned plants operate at a fraction of their capacity because of poor maintenance and aging equipment. The West African nation exchanges 60,000 bpd of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Ivory Coast, according to Nigeria National Petroleum Corp.

“We are right now undergoing a major turnaround maintenance program” of the refineries, Ms. Alison-Madueke said.

Improvements to the two-unit, 210,000-bpd Port Harcourt refinery, the country’s biggest, will be completed by the end of the year, to be followed by enhancements at the Warri and Kaduna sites in 2014, according to the NNPC. Warri has a processing capacity of 125,000 bpd and Kaduna, 110,000 bpd.

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