Nigeria/China’s $28.5bn Oil Deal may be Truncated
THE recent deal between China and Nigeria to construct three oil refineries and a petrochemical plant estimated to cost $28.5 billion may be truncated as the Export-Import Bank of China (Exim Bank of China) and other Chinese consortium, which are to finance the project, are doubtful of its viability.
BusinessWorld Intelligence revealed that the inability of the federal government to completely remove subsidy on petroleum products and the tendency of China to abandon project as exemplified by Mambila Hydropower Project in Adamawa State, which has now become moribund, are some of the impediments to the progress of the new deal.
According to a source close to the deal, apart from China Exim Bank, other Chinese financiers do not have credibility and are unlikely to raise $28.5 billion, adding that there are numerous cases of projects that have been abandoned by China in other parts of Africa.
The Nigerian National Petroleum Corporation (NNPC) and China State Construction Engineering Corporation Limited (CSCEC) recently signed an agreement for the joint sourcing of funds for the construction of three Greenfield refineries and a petrochemical plant estimated to cost $28.5 billion, a major step in the nation’s quest for self reliance in petroleum and associated products production.
On completion of the three Greenfield refineries, which are to be located in Lekki, in Lagos State; Brass, in Bayelsa State and Lokoja, in Kogi State, as the site for the petrochemical plant has yet to be decided, the three Greenfield refineries would add a combined capacity of 750,000 barrels a day, well in excess of domestic demand of some 450,000 b/d by the time they were finished in a scheduled five years.
Five years ago, two Chinese companies, China Gezhouba Group Corporation (CGGC) and China Geo-Engineering Corporation (CGC), signed a contract to construct the dam in Mambila for Hydropower project.
BusinessWorld Intelligence revealed that the inability of the federal government to completely remove subsidy on petroleum products and the tendency of China to abandon project as exemplified by Mambila Hydropower Project in Adamawa State, which has now become moribund, are some of the impediments to the progress of the new deal.
According to a source close to the deal, apart from China Exim Bank, other Chinese financiers do not have credibility and are unlikely to raise $28.5 billion, adding that there are numerous cases of projects that have been abandoned by China in other parts of Africa.
The Nigerian National Petroleum Corporation (NNPC) and China State Construction Engineering Corporation Limited (CSCEC) recently signed an agreement for the joint sourcing of funds for the construction of three Greenfield refineries and a petrochemical plant estimated to cost $28.5 billion, a major step in the nation’s quest for self reliance in petroleum and associated products production.
On completion of the three Greenfield refineries, which are to be located in Lekki, in Lagos State; Brass, in Bayelsa State and Lokoja, in Kogi State, as the site for the petrochemical plant has yet to be decided, the three Greenfield refineries would add a combined capacity of 750,000 barrels a day, well in excess of domestic demand of some 450,000 b/d by the time they were finished in a scheduled five years.
Five years ago, two Chinese companies, China Gezhouba Group Corporation (CGGC) and China Geo-Engineering Corporation (CGC), signed a contract to construct the dam in Mambila for Hydropower project.
