HUGE FUNDING COST ISSUES THREATEN PRIVATE REFINERY INITIATIVES

OILRIG WORKER

Faced with the challenge of raising funds to actualise their dreams of building private refineries, only 6 out of the 25 indigenous companies issued licences by the Department of Petroleum Resources (DPR) in July 2015, have secured the nod of the regulators to advance to the next stage of operation, Leadership reports.

The Head, Engineering & Standards, DPR, Engr. Olumide Adeleke said the advancement came on the heels of a series of meetings held between the management of DPR with the CEO’s of the 25 licensees to evaluate the progress made one year after the issuance. The meetings said to have lasted for over two months took place at the DPR’s headquarters in Lagos. Adeleke stated that the greatest challenge faced by prospective operators was the access to funds. He added that since most of the equipment required was sold in dollars, the task was even becoming tougher with the current situation in accessing foreign currency (FOREX) in the open market.

During the week, DPR published on its website the result of the findings, which showed that only 6 companies (including the Dangote Oil Refinery Company) have secured the approval to proceed to the second stage known as approval to construct (ATC) with the remaining still at the initial level of licence to establish (LTE). According to the report, those already issued ATC have a combined capacity to produce 698,000 barrels per day (BPD) of various products such as premium motor spirit (PMS), HHK, automotive gas oil (AGO), LPFO, power and petrochemicals.