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B N W: Biafra Nigeria World News |
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Chinese firm may take over refineries
THE Federal Government has opened negotiations with a Chinese oil firm, SINOPEC, to take over the Kaduna and Port-Harcourt refineries under the on-going privatisation programme.
Already, a 10-man technical committee has been set up to draft a Memorandum of Understanding (MoU) that will form the basis of discussions and concessions by both parties.
The committee has three months to turn in its report for consideration by the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and the Bureau of Public Enterprises (BPE).
Members of the committee were drawn from the Office of the Special Adviser on Petroleum and Energy Matters, the NNPC, the BPE, the Nigerian Investment Promotion Commission and the Chinese group.
The development may have pushed forward to 2005, the government's initial plan to privatise the refineries.
Similarly, this initiative by the government and the Chinese firm may have dashed the hopes of some indigenous firms that had expressed interest in the acquisition or management control of the refineries. Now, only the Warri refinery may be open to other prospective investors.
The Chinese firm, a consortium of three companies, are SINOPEC which specialises in the downstream sector; CNPC for the upstream onshore activities; and SNOOC, another subsidiary company, for upstream offshore operations.
The Guardian learnt that based on a presidential approval for the deal, October 2005 has been given for the take-off of actual operation by the companies.
Under the strategic partnering method to be adopted for the privatisation of the refineries, the Chinese firm as core investor will control 51 per cent in each of the plants while the government will retain the balance of 49 per cent.
According to sources, the companies are already in Sudan, Chad and Venezuela. They produce heavy crude in the Chad area, which can easily be piped to Kaduna for refining.
The configuration of the refinery is such that 60,000 barrels out of the 110,000 barrels required on a daily basis is heavy crude and the balance comes from the Escravos blend crude.
Confirming the development at the weekend in Lagos, General Manager, Group Public Affairs of NNPC, Dr. Levi Ajuonuma, said that the MoU would be signed before the end of the week.
Ajuonuma stated that other countries such as Libya, Norway, Russia and Algeria are being expected in the country as part of government's decision to open up the downstream oil sector for private investment.
"There is no way these multinationals will invest in the downstream sector without it impacting on petroleum products prices and job creation," he said.
According to the NNPC spokesman, the Libyan firm is equally interested in acquiring the Kaduna refinery.
It was learnt that the government would have loved to have any of the multi-national oil companies to come into the refineries. None of them has however shown interest in the plants. The government is said to be keen in having companies that will bring in money and technical expertise to make the refineries work.
The Port-Harcourt refinery has 210,000 barrels per day capacity. Sources stated that the Chinese group is seeking co-operation with the NNPC in Oil Mining Leases (OMLs) 111 and 65 located in the Niger-Delta region.
"The mission of the Chinese company, which has received the blessing of Mr. President, is to acquire interest in some OMLs and Oil Prospecting Leases (OPLs) relinquished by other companies and to even seek partnership in the marginal fields with our local investors," the sources disclosed.
As part of its desire to privatise the refineries this year, the Federal Government had projected that with the completion of the Turn Around Maintenance (TAM), which began early this year, the four refineries would by now operate at optimal capacity. This was expected to raise production level to 18 million litres of Premium Motor Spirit (PMS) once the Fluid Catalytic Cracking (FCC) units of the plants are streamed.
After the dissolution of the board of the refineries early this year, the government has re-constituted a committee to take over the management of the plants and to ensure their successful privatisation.`
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