Page 12 - AfrOil Week 02 2021

AfrOil INVESTMENT AfrOil

NNPC eyes $1bn prepay deal

to fund refining revamp

NIGERIA NIGERIA’S state-owned NNPC is negotiating because of weak prices.
a $1bn prepayment deal with trading firms to NNPC’s refineries sustained some
raise funds for the modernisation of its largest NGN167bn ($439mn) in losses in 2019 and only
refinery in Port Harcourt, sources told Reuters the Warri refinery processed any oil. The com-
on January 7. pany opted to close down the plants completely
The 210,000 barrel per day (bpd) Port Har- in April 2020 pending their rehabilitation. It
court facility and NNPC’s other refineries in launched a contract for the Port Harcourt com-
Kaduna and Warri were built in the 1970s and plex’s modernisation in December.
are in need of extensive repairs and modernisa- NNPC CEO Mele Kyari said last year he
tion. Their poor state means they can only oper- wanted to see private companies run the refin-
ate at a fraction of their combined 445,000 bpd eries once their refurbishment is complete.
nameplate capacity. Nigeria is also awaiting the launch of the
According to Reuters, the prepayment funds 650,000 bpd privately owned Dangote refinery
would be repaid over seven years through deliv- next year. But the project, the largest of its kind
eries of crude oil, as well as refined products in Africa, is already running years behind sched-
once the refinery has been modernised. Cai- ule. Coronavirus disruptions last year mean fur-
ro-based Afreximbank is helping to arrange the ther delays are probable. ™
financing, the news agency said.
NNPC has not commented on the matter.
But Reuters said discussions were underway
with a range of foreign and Nigerian trading
houses.
Nigeria relies heavily on fuel imports despite
its status as Africa’s biggest oil producer. NNPC
has made a number of unsuccessful attempts to
rehabilitate its ailing refineries over the years.
Last year it similarly tried to partner with oil
traders, producers and engineering firms to
fund refurbishment. But it gave up after a year
of fruitless talks.
The company’s latest effort comes amid a
squeeze in global capital as a result of the coro-
navirus (COVID-19) pandemic. Investors also
have less appetite for the commodities market The Port Harcourt refinery is in need of extensive repairs (Photo: Vanguard)

PERFORMANCE
PwC: Low prices may reduce African

oil export revenues by $1 trillion

REGIONAL OIL-PRODUCING states in Africa are likely that crude oil prices and energy demand had
to experience disappointment with respect to both declined last year, largely because of the
crude export revenues over the next two dec- coronavirus (COVID-19) pandemic. Conse-
ades, according to PricewaterhouseCoopers quently, it said, world crude prices are not likely
(PwC), one of the world’s largest accounting to rise above an average level of $54 per barrel
firms. over the next few years.
In a new report titled Africa Oil and Gas This pressure on prices will have a negative
Review 2020 and released last week, PwC noted effect on oil producers’ earnings, the report said.

P12 www. NEWSBASE .com Week 02 13•January•2021