IOC to set up oil refinery in Nigeria

By siliconindia staff writer   |   Wednesday, 09 June 2004, 19:30 IST
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NEW DELHI: Indian Oil Corp, the country's largest oil firm, will set up its first overseas oil refinery in Nigeria as part of its drive to expand globally. "IOC has been invited by the Edo State of Nigeria to set up a grassroot (new) refinery. Our board has approved signing of a Memorandum of Understanding with the Governor of Edo for the project," IOC director (business development) Naresh K Nayyar told PTI in Mumbai. The capacity of the refinery and the investments have not yet been firmed up. "We propose to take up the project as a joint venture with Edo State," he said. However, IOC has conditioned building the refinery on the fiscal regime provided by Edo, which produces Escravos and Forcados crude grades. "We want stake in an oil field so that the refinery gets steady feed of crude oil for processing." IOC, which has also bid for revamping the existing refineries in Nigeria, wants to enter auto fuel retailing business too, he said. Oil-rich Nigeria has four refineries with a total capacity of 445,000 barrels per day (22.5 million tonnes) but output of petroleum products is restricted to just 25 per cent of the capacity as the machines are old. The west African nation has a total demand for 257,000 barrel per day (12.9 million tonnes) of petroleum products and the new refinery is proposed to feed Edo, one of Nigeria's largest oil consuming states, and exports to Europe. A stake in a property in the oil-rich Niger River Delta would not only give the proposed refinery raw material but also send back home crude oil for IOC's seven refineries. Already, IOC refineries import both Escravos and Forcados grades of crude produced by Shell International and ChevronTexaco in Edo. With domestic margins shrinking due to increased competition, IOC is in an expansion mode overseas. Besides looking for upstream opportunities for having its own crude oil, the company has bid for upgrading Tehran and Tabriz refineries in Iran and laying a 1400-km pipeline in Sudan. IOC, which has already acquired petrol stations in Sri Lanka and Mauritius, is also looking at retail opportunities in Thailand, Ghana and Indonesia, he said. Nigeria's estimated proven oil reserves range from 26 billion to 31.5 billion barrels. The majority of these are found in relatively simple geological structures along the country's coastal Niger River Delta. The majority of the oil lies in about 250 small (less than 50 million barrels each) fields. A major problem facing Nigeria's upstream oil sector has been insufficient Government funding and output from its four refineries (Port Harcourt I and II, Warri and Kaduna) is sharply decreasing due to poor management and lack of turnaround maintenance. While Nigeria's state-held refineries are slated for privatisation, plans for several small, independently-owned refineries are being developed. The offer to IOC by Edo is under one of them. HT Archives » Archives available from July 1, 2002. For past editions, use HT Archives Advanced Search Voice your opinion Have Your Say Feel strongly about something. Have your say here » Read other views » E-mail us Feedback Terms & Conditions Advertisements Terms and Conditions [X] close Reproduction in any form is prohibited without prior permission. This website is optimised for IE 6.0 and above. © HT Media Ltd. 2004.

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