BackNigeria wants IOC to build refinery in President’s home state
Move comes at a time of growing interest from African countries to leverage India’s refining expertise
Premium(Afolabi Sotunde/Reuters)
New Delhi: Oil- and gas-rich Nigeria wants state-run Indian Oil Corp. Ltd (IOC) to construct a $5 billion (around ₹ 26,550 crore today) refinery in President Goodluck Jonathan’s home state of Bayelsa.
Emmanuel Egbogah, special adviser to the Nigerian president on petroleum, said that his country wants IOC to commission and operate the refinery. This is in addition to IOC’s plans to help Nigeria revive production at Nigerian National Petroleum Corp.’s 12 million tonnes per annum (mtpa) refineries at Port Harcourt that are currently operating at 33% capacity. Such a presence would help India secure access to oil and gas blocks in energy-rich Africa.
“We want IOC to set up the refinery in our President’s own state. The refinery is expected to have a size of 300,000 barrels per day (bpd) to 400,000 bpd. We will make the investment," said Egbogah.
India has, in recent years, scrambled to come up with a cohesive economic diplomacy policy in Africa, where it has lost ground to China. The Indian government has close relationships with most African countries, stemming from its support for their independence. Africa is estimated to have around 10% of the world’s oil reserves and a number of Indian hydrocarbon firms are interested in acquiring hydrocarbon blocks in Nigeria. Around 15% of the crude oil India imports come from Nigeria. The country has 36.2 billion barrels of proven oil resources and is a member of the Organization of the Petroleum Exporting Countries (Opec). It has the second largest hydrocarbon reserves in Africa after Libya.
This comes at a time when there is a growing interest from African countries to leverage India’s expertise in the oil refining sector. Another case in point is Sudan, which has initiated talks with India’s Essar Group.
“We have initiated talks with Essar for building a new refinery at Port Sudan and also for updating the existing one. In addition, we also want them to upgrade another refinery," said Awad Ahmed El-Jazz, Sudan’s petroleum minister.
India has a refining capacity of 213 mtpa and is currently ranked fourth in the world. This is expected to increase to 232.3 mtpa at the end of the current fiscal and 310.9 mtpa by 2016-17. South Sudan, created in July 2011, owns 85% of undivided Sudan’s hydrocarbon resources, but the North, known only as Sudan, has the entire refining infrastructure.
In addition, Sudan also wants Indian firms to participate in around three blocks that it plans to seek bids for, said Isameldin Taha M. Osman, deputy director general in Sudan’s petroleum ministry.
An Essar Group spokesperson didn’t respond to emailed queries till press time.
Essar Group has a presence in Africa’s refining sector with its Mombasa refinery acquisition in Kenya.
With a significant number of Indian firms picking up stakes in hydrocarbon blocks in the region, a refinery arrangement would be an asset to the value chain. ONGC Videsh Ltd invested $2.5 billion in petroleum exploration and production in undivided Sudan as part of the Greater Nile Petroleum Operating Co., in which it owns a 25% stake. Its partners are China National Petroleum Corp. (40%), Petronas Carigali Overseas Sdn. Bhd. (30%) and Sudapet Co. Ltd (5%).
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