Nigeria's bid to get private investors including foreign oil companies, to manage its four oil refineries may have run into a hitch after lawmakers in the lower legislative chamber House of Representatives called for a halt to the process, state oil firm Nigerian National Petroleum Corporation said Thursday.
NNPC had begun talks with its foreign partners Eni, Total and Chevron to assist with the revamp of the state-run refineries. It had on April 19 issued a tender seeking investors to jointly fund the repairs expected to cost $700 million, and the running of the facilities, as well as to enable Nigeria to eventually expand existing refineries to refine up to 650,000 b/d of domestic crude.
The House of Representatives committee on Privatisation and Commercialisation on Wednesday however, asked NNPC to halt the process on the ground that state privatization agency, BPE, was not involved which was in breach of Nigerian law, the local Punch newspaper reported Thursday.
"We have received the report of the decision of the House committee, and I can tell you that will affect investors' interest in NNPC's bid to revamp the refineries," an NNPC spokesman told Platts.
"The lawmakers got the whole picture wrong, NNPC is not selling the refineries now but bringing in private investors to assist in funding their repairs as well to manage them," the spokesman added.
The tender closes on May 30, and NNPC fears the lawmakers' decision will cool investor interest.
NNPC's existing four refineries, including two located at Port Harcourt with a combined capacity of 210,000 b/d, the 125,000 b/d Warri refinery and the 110,000 b/d northern Kaduna refinery, have operated sporadically due to years of neglect and official corruption.
Cash-strapped NNPC had said previously it would require $700 million to put the refineries back into top shape that would increase capacity utilization to about 90%.
The government said recently it planned to initiate fresh moves to privatize the refineries before the end of this year, coming on the heels of public backing for the removal of fuel subsidy.
Previous bids by the government to sell off the refineries, including an elaborate plan announced in December 2013 by BPE, had been met with strong opposition by labor unions.
Africa's top oil producing nation imports more than 90% of its gasoline requirement because of the inadequate domestic refining capacity.
