The Federal Executive Council has approved $1.5 billion of spending on the modernisation of the Port Harcourt oil refinery and awarded a contract to Italy’s Tecnimont, Petroleum Minister Timipre Sylva said on Wednesday.
The project will be completed in three phases, the first within 18 months taking the refinery to 90 per cent production capacity, with the second and final phases carried out within 24 months and 44 months respectively, Sylva told reporters in Abuja.
Africa’s top oil exporter has made producing its own fuels a priority for years but efforts to revamp its refineries have failed, leaving it almost entirely reliant on imports.
It is now struggling to balance a promise to end costly fuel subsidies with public anger over more expensive fuel.
“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery … and … it was approved by council today,” the minister said.
Slyva said funding will come from the state-oil company’s cash flow, budget provisions and Afreximbank.
Reuters reported in January that NNPC was in talks to raise around $1 billion to refurbish its largest refining complex at Port Harcourt and that Afreximbank is looking into a facility for the refurbishment.
The country opened bids in December for investors to carry out engineering work for the revamp.
Nigeria has four refineries with a combined capacity of 445,000 barrels per day (bpd): one in the north at Kaduna and three in the oil-rich Niger delta region at Warri and Port Harcourt. The Port Harcourt complex consists of two plants with a combined capacity of 210,000 bpd.
In April 2020, they were all shut pending rehabilitation while the refineries lost some 167 billion naira a year early and only Warri processed any oil.
