Indications are that the Nigerian National Petroleum Corporation is seeking to raise the sum of $1 billion to finance its moribund Port Harcourt Refining and Petrochemical Company (PHRC) despite recording huge operating losses. Reuters reports that the Corporation intends to raise the fund in prepayment with trading firms to refurbish its largest refining complex at Port Harcourt.
The international news organisation said NNPC declined to comment but that about seven sources familiar with the discussions confirmed the development. It quoted the sources as saying that discussions were taking place with a range of foreign and Nigerian trading houses, including some that have previously worked with Nigeria, and asked not to be named.
Should the revamping happen, it would reduce Nigeria’s hefty fuel import bill. It would also result in Nigeria’s second oil-backed financing since the COVID-19 pandemic, the report said. The report further quoted the sources as confirming that the fund is expected to be repaid over seven years through deliveries of Nigerian crude and products from the refinery once the revamping is complete. The Cairo-based Afreximbank, lead financier, was quoted as saying, “Afreximbank is looking into a facility for the refurbishment of the Port Harcourt Refinery. However, the borrower is yet to be determined.”
Nigeria has four refineries with a combined capacity of 445,000 barrels per day (bpd) – one in the north at Kaduna and three in the oil-rich Niger delta region at Warri and Port Harcourt. The Port Harcourt complex consists of two plants with a combined capacity of 210,000 bpd. The NNPC had reported in June 2020 that its three refineries recorded a combined loss of N154 billion in the 2018 financial year.