NNPC set to raise $1bn to revamp Port Harcourt refinery

The Nigerian National Petroleum Corporation, (NNPC) wants to raise $1 billion oil prepay for revamping of the Port Harcourt refinery.

A report by Reuters revealed that the Corporation wants to raise the fund in prepayment with trading firms to refurbish the refinery.

NNPC, however, declined to comment, but some sources well-known with the discussions have confirmed this development.

According to the sources, discussions were taking place with a range of foreign and Nigerian trading houses, including some that have formerly worked with Nigeria, but don’t want to be named.

Gentechnews gathered that should the revamping take place, it would reduce Nigeria’s hefty fuel import bill as well as result in Nigeria’s second oil-backed financing since the COVID-19 pandemic.

The sources also revealed that the fund is expected to be repaid once the revamping is completed over seven years through deliveries of Nigerian crude and products from the refinery.

Cairo-based Afreximbank is said to be leading the financing and a spokesman for the Afreximbank said: “Afreximbank is looking into a facility for the refurbishment of the Port Harcourt Refinery. However, the borrower is yet to be determined.”

A source at one foreign bank, who pleaded anonymity, said: “It was unlikely to participate in Nigeria’s latest effort because of lower credit availability and increased reluctance to take out exposure in a high-risk country.”

Recalled, that Nigeria has four refineries at Kaduna, Warri and Port Harcourt with a combined capacity of 445,000 barrels per day (bpd).

One of the Refineries is in the north at Kaduna and three in the Niger Delta region at Warri and Port Harcourt.

The Port Harcourt complex comprises of two plants with a combined capacity of 210,000 bpd, but in 2019, the refineries lost about 167 billion naira ($439.47 million) and only Warri did not processed any oil, while in April 2020, the whole refineries were shut awaiting rehabilitation.