NIGERIA on Monday signed a Memorandum of Understanding with an American energy firm to build six oil refineries, in a project worth 4.5 billion dollars, according a statement by the federal government.
The deal comes as part of the Jonathan Administration’s effort to turn around the fortunes of Nigeria from a net importer of oil that currently pays unreasonably high prices for its own crude to a position where her fortunes would be in tandem with the country’s role as Africa’s largest oil producer.
The deal between US-based Vulcan Energy, the Nigerian federal government and a local firm, aims to build six refineries with a combined capacity of 180,000 barrels per day, Nigeria’s Trade and Investment Ministry said in a statement, which also listed the 697.5 billion naira ($4.5 billion) price tag.
Two of the refineries are to be completed within a year, according to the terms of the MoU.
“This is the beginning of changing our old paradigm from exporting just raw materials and exporting jobs to the Western countries,” Trade and Investment Minister Olusegun Aganga said in the statement.
The latest development is part of larger efforts to revamp things in the energy sector, which has been besotted by a string of issues relating to corruption over the years, making sure that the over 2 million barrels a day that Nigeria produces as the world’s eight largest oil producer has little or no impact on the overall economy.
Last week, President Goodluck Jonathan fired the chief executive of the Nigerian National Petroleum Corporation, a move that the president’s office said was designed to boost transparency and accountability.
Vulcan’s vice president, Jim Mansfield, said the MoU highlighted Nigeria’s attractiveness as an investment destination.
“The funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business,” he was quoted in the statement as saying.
Houston-based Vulcan currently operates in several US states as well as Canada.