Nigeria announced on November 21st that potential investors in private refineries would have to pay full market prices for its crude oil.
Nigerian President Olusegun Obasanjo said that the government would outline an extensive policy concerning independent refineries, specifying the amount of Nigerian crude that would be made available to the refineries for domestic and export production.
Obasanjo cautioned that investors would not receive oil allocations until refineries were established and that the refiners “will have to pay market prices for whatever quantities of crude oil are allocated to them.
” He indicated that the government would not supply full volumes of crude to refineries producing for export and said that two groups holding refinery licenses could have them revoked if they do not establish their facilities within a time frame to be set.
Brass Petroleum Nigeria Ltd. and Qua-Iboe Petroleum Nigeria Ltd. both received refinery licenses in 1996, but still have not constructed the plants.
Nigeria has been forced to shell out for large amounts of imported fuel and products because its four state-run refineries have been inadequate in meeting growing domestic demand.
The four refineries, run by state-owned Nigerian National Petroleum Corp. (NNPC), have a total nameplate capacity of 445,000 b/d, but often are unable to refine the 300,000 b/d that is supposed to satisfy Nigeria’s domestic consumption requirements.
