The Federal Government of Nigeria and Italian oil giant, Agip, have reached an agreement for the building of a 150,000 capacity new refinery in Rivers State, South South Nigeria.

Minister of State for Petroleum, Ibe Kachikwu, stated this while briefing State House Correspondents on the outcome of a meeting between the Ministry of Petroleum, the Nigerian National Petroleum Corporation, NNPC, and the Agip Oil Corporation at the Conference of the Vice President’s Office.

“We reached an agreement that Agip will build a brand new refinery of a 150,000 barrels capacity, which will either be located in Port Harcourt or Brass,” Kachikwu said, adding that a Memorandum of Understanding was being prepared to that effect.

He said the effect of the new refinery would bear on the insistence that oil companies who work in Nigeria should migrate from exporting crude oil and begin to look at how to refine crude and help local capacity to refine for consumption.

According to the Petroleum Minister, the refinery would give “us a lot of momentum in our quest to try and localize our capacity to produce every refined petroleum product we need in the country and to meet the timeline of 2019 that we have been targeting conceptually.”

Kachikwu called other multi-national corporations operating in Nigeria to borrow a leaf from Agip even in power generation, an area where Agip is building its second power plant that should be upstream between 2019 and 2020.

$15billion Investment
Kachikwu said the meeting, chaired by Nigeria’s Acting President, Professor Yemi Osinbajo, also dealt “with issues relating to Agip’s investment in Zabazaba Field and their co-operation with us in terms of the repairs of the Port Harcourt Refinery where they are working with OANDO and few other people.”

He said the total sum that Agip is investing in all the projects is in excess of $15 billion, which he described as “a major push in terms of our search for investment.”

Asked if Agip’s plan to build a new refinery would not have a negative effect on the existing refineries owned by the NNPC as did the telecom companies on the defunct Nigerian Telecommunications, NITEL, Kachikwu said: “we are not saying Agip is going to take over your own refineries; they are going to build their own refinery.”

He said it would not be different other investors building refineries.

“If our own will pack up because they are building, we must be doing something wrong,”

Kachikwu stated, pointing out that “if they are going to bring the best practices to the field, we must procedures best practices.”

He said the ultimate goal was to look at expert models like others in Europe and India to position Nigeria’s refineries to supply the African market.

“Market protectionism is not going to be the answer,” Kachikwu said, adding that matching international standards by getting Nigeria’s systems up in levels of performance.