Dr. Ibe Kachikwu, Nigeria’s Minister of State for Petroleum says the nation’s refineries would no longer be revived in 2019 as earlier planned due to delays in reaching financing agreement.
“It is not likely to happen by the end of 2019 because the financing talks for the joint ventures took longer than expected,” Kachikwu, said in Cape Town, South Africa.
The facilities, which have long operated at a fraction of their capacity, began looking for private partners last year to help improve output.
“Funding is to be secured next month, with two years required to bring the plants closer to their full combined capacity of 445,000 barrels a day,” Bloomberg quoted Kachikwu as saying.
Also speaking in an interview with S&P Global Platts on the side-lines of the Africa Oil Week conference in Cape Town, Kachikwu acknowledged that there have been delays in the planned revamp of the four petroleum refineries owned by the Nigerian National Petroleum Corporation (NNPC) in Kaduna, Warri and Port Harcourt.
He said he was hopeful that the federal government would unveil details of the overhaul of the refineries by the end of this year, after which work could commence by early 2019.
Meanwhile Nigeria’s oil production will climb to around 2.2million barrels per day (bpd) by early 2019 with the start-up of the giant 200,000 bpd Egina field, the Minister also said.
This is as crude oil rebounded to $73 per barrel wednesday after falling to its lowest since August, supported by a report that Russia and Saudi Arabia are discussing oil output cuts in 2019.
“Egina should come into production in December or may be January…Hopefully, that should lift us closer to 2.15 million-2.2 million by the start of next year barring any unforeseen shutdowns,” said Kachikwu.
While the country has reportedly not seen any major new oil projects in the last five years, the $16 billion Egina deep-water project by Total is seen to be pivotal to Nigeria’s production increment plans.
The project is at the moment the biggest oil and gas investment in Nigeria and will boost the country’s crude production by over 10 per cent.
Kachikwu, however, said foreign investment in the country’s oil industry had improved and was “reasonably good…production could rise by a further 200,000 to 400,000bpd over the next few years, if we get the right sort of financial investments that are required,” he added.
According to the minister, the Bonga Southwest and Zabazaba projects were the two upstream investments that could further propel oil production.