The Head of Nigeria’s National Oil Company, Mele Kyari, said that the overhauling of the four state-owned refineries is an integral part of the Nigerian National Petroleum Corporation’s (NNPC) plans. He noted the West African oil giant will continue swap deals to secure products until her state-owned refineries begin to function in 2023.

The Group Managing Director made this known during a webinar for the African Refining Association. He said it is important to restore product storage depots and associated pipelines. NNPC is relying on private sector financing and using the BOT (build, operate and transfer) model for the rehabilitation of the refineries.

A tender was launched for the rehabilitation of the pipelines in August and successful bidders are expected to be announced in the first quarter of 2021. Nigeria is also pushing to lower emissions and will continue to promote the use of natural gas.

The Oil company chose 15 companies to supply products under its Direct Sale, Direct Purchase (DSDP) programme in August 2019. The contracts ran for one year from September 2019 to September 2020 and was extended for six months by the NNPC. The DSDP programme was launched in 2016.

Under the DSDP programme, NNPC provides crude oil under a Free on Board (FOB) basis to a supplier while the supplier in return provides petroleum products to the NNPC at a designated port in Nigeria. The products supplied are equivalent to the amount of crude oil received by the supplier.

Kyari said, “The outlook for Nigeria’s downstream sector looks bright with attractive market conditions, large market, significant crude distillation capacity additions from various refinery projects, improvements of the distribution network and the use of natural gas.”