LAGOS — TOTAL Support Refineries (TSR), one of the 21 refineries licensed by the Federal Government in 2001, has concluded arrangements to begin construction of a $100million (N13.4billion), 12,000 barrels per day capacity modular refinery in Calabar.
This development follows an approval to build granted by the Department of Petroleum Resources (DPR).
It was also gathered that the multinational oil exploration and production companies operating in Nigeria may have ruled out the possibility of refining crude oil produced in the country locally, for reasons yet to be advanced.
At the ground breaking ceremony for the TSR in Calabar recently, it was gathered that the refinery which is scheduled to be completed in 24 months shall be funded through 60 per cent debt financing and 40 per cent equity financing.
It is expected that the US EXIM Bank will guarantee 85 per cent of the debt financing through some local banks led by First Bank of Nigeria, Zenith Bank, Intercontinental Bank, First Atlantic Bank, and Diamond Bank Nigeria Limited. Essentially, the US EXIM Bank is expected to finance all aspects of the debt financing package emanating from the USA and all aspects of the financial package are expected to be in place before the end of October this year.
Governor Donald Duke of Cross Rivers State had while performing the ground breaking ceremony for commencement of construction said it was painful to note that Nigeria exports huge amounts of crude oil yet, imports petroleum products.
He recalled that while in Holland with President Olusegun Obasanjo on invitation of the immediate past managing director of the Shell group, he was made to understand that the company’s total output worldwide was two million barrels per day and that its operations in Nigeria accounts for about 1.1million barrels per day.
Governor Duke pointed out that the Shell boss expressed gratitude for the massive goodwill the company had enjoyed from the Nigerian government and asked the President how the company can reciprocate the gesture. The governor said he then proposed that the company should refine 50 per cent of its output in Nigeria, but that the Shell helmsman had retorted saying it wasn’t going to happen.
“I considered his response undiplomatic and downright insolent especially since it was made in front of Mr. President. If I was in his shoes, I would simply have said we will look into it,” he said.
The governor commended the initiative behind the establishment of the refinery, adding that he was giving it his support because he had been given the assurance that it will be one of the most environmentally friendly in the world. Investigations also indicate that other multinational oil and gas exploration and production companies in the country may have also ruled out the possibility of refining crude oil locally.
However, it would be recalled that only recently, the government served notice that all exploration and production companies shall be required to refine at least 60 per cent of their output locally by 2006.
