Source: The Guardian
Visor Capital and the Barrington Group of the United States (U.S.), in collaboration with Helix Oil International Limited based in Greece, have concluded plans to finance a private refinery project in Nigeria.
Mr. Roland Enang, managing director, Helix Oil International (Nigeria) Limited confirmed that the U.S. firms have agreed to deploy the amount for the financing of 300,000 barrels per day refinery in the country to refine petroleum products, both for domestic consumption and export.
The construction of the refinery, according to him, is slated to resume in 2008 on completion of regulatory arrangements with the Department of Petroleum Resources (DPR).
The project being a mega plant would cost about $6 billion (N720 billion) in Nigeria, he said.
"In fulfillment of the Federal Government's local content requirement for this venture, Helix Oil International (Nigeria) Limited has been incorporated as the special purpose vehicle for this investment initiative. This also informed the resumption of negotiation for necessary approval and preparation for agreement on
the provision of incentives by the Federal
Government," he said.
Enang explained that examination of the private refinery's guidelines provided by the DPR after a strategic meeting recently in Lagos led to the choice of 2008 as the date for finalising the feasibility studies, approval of final investment decision, and commencement of construction.
He added that improvement in the enabling environment provided by the administration of President Umaru Yar'Adua encouraged the company to undertake investment in the downstream sector of the Nigerian oil industry.
"Our team from the U.S. and Greece have been invited by the Federal Government for a special meeting in Abuja next after the examination of our proposal and achievement in several countries," he noted.
He added that the company has also identified strategies to overcome existing challenges responsible for the poor performance of the 18 firms granted approval to undertake the construction of private refineries.
For instance, he noted that the Federal Government restated its commitment at the meeting with the company's officials to support genuine investors in private refineries with the guarantee of adequate crude oil supply, provision fiscal incentives and removal of unnecessary clauses in granting approval in all the stages of establishing a private refinery.
"We want to believe that the willingness of the Federal Government to reduce dependence on importation of petroleum products for domestic utilisation would facilitate the fulfillment of promises made at the meeting so that loss of huge revenue being incurred on fuel importation would be utilised for the development of other real sectors of the Nigerian economy," he stressed.
However, he hinted that the company and its foreign partners would also use the meeting with the Federal Government in January 2008 to examine opportunities available in the construction of an independent power plant (IPP) to ensure access to cheap and adequate power supply by communities within the area of proposed refinery.
Besides, he gave the assurance that the company would overcome all the existing challenges associated with an investment in private refineries as a result of the willingness to accept marginal profit as returns on investment in line with the support of Nigerian directors on the company's board.
Dr. Sam Onuoha, director, Helix Oil International (Nigeria) Limited, said the company has put in place good projects to be financed in host communities under its corporate social responsibility (CSR) programme.
He added that the company would avoid insensitivity to the plight of the host communities to avoid kidnap and attack on production platforms by militants in the Niger Delta, responsible for disruption of its operation.
"We would finance the construction
of good roads, hospitals and employ people from our host communities among others, so that the people would see themselves as stakeholders in our refinery project," he promised.
Mr. Femi Dosumu, managing director, Meritan Oil Limited, an indigenous distribution and marketing company, said necessary support is being provided for the foreign investors to realise the dream of completing the refinery project. This, according to him, would assist his company to have easy access to petroleum products without the payment of demurrage.
"On completion of the refinery project, monthly expenditure of N3 billion demurrage on fuel importation by petroleum marketing companies in Nigeria would become a thing of the past," he added.