FG Gets One Year Extension for Greenfield Refinery Project

Deziani Alison-Madueke , Petroleum Resources Minister

By Chika Amanze-Nwachuku

China State Construction Engineering Corporation (CSCEC) has extended by one year a Memorandum of Understanding (MoU) it signed last year with the Nigerian National Petroleum Corporation for the construction of three Greenfield Refineries and a Petrochemical plant in Nigeria.

The renewal of the MoU followed NNPC’s inability to make the May 13, 2011 earlier set for the projects envisaged to boost Nigeria’s refining capacity by additional 750,000 barrels per day.

Conveying the board’s decision in a memo Friday to the Group Managing Director (GMD) of the NNPC,  Austin Oniwon, CSCEC’s Vice President Overseas Operations, Yu Zhende, noted that the extension was granted based on NNPC’s assurance that feasibility studies for the three refineries would be carried out in July.

The one paragraph memo, a copy of which was obtained by THISDAY, read: “Further to your request to extend the May 13, 2010 MoU between the NNPC and CSCEC for one year, we have held discussions with our board and advised (Detailed Feasibility Studies (DFS) will be ready in July. Although our board would have preferred a three-month extension (because of the need to commence loan negotiations, we accept your request to renew the MoU till May 13, 2012”.

The MoU signed by Nigeria and China in May last year was for the construction of three oil refineries in Lagos, Kogi and Bayelsa States under a $28 billion provisional deal. The start of the construction, according to the MoU, was dependent on the conclusion of negotiations, which had been slated for 5 July. Under the plan, each new refinery will be able to process around 250,000 barrels of oil a day, potentially meeting Nigeria’s estimated need of 750,000 barrels per day over the next ten years.

Under the terms of the agreement, 80 percent of the projects cost were meant to be funded with a term loan provided by China Export Credit Insurance Corpo-ration (SINOSURE) and a consortium of Chinese banks led by the Industrial and Commercial Bank of China, the world’s largest bank.

The project was envisaged to add 750,000 barrels per day of extra refining capacity to Nigeria’s current 445,000 barrel per day refining capacity as well as stem the flood of imported refined products into Nigeria.

The parties had agreed to build two Greenfield 300,000 barrels per day refineries – one each in Lagos and Bayelsa – and a 150,000 b/d refining plant in Kogi and a gas refining/petrochemical plant based on the gas pipeline network envisaged under the Gas Master Plan. The estimated cost of all four projects had been put at $28.5 billion in which NNPC was to foot only 20 percent of the cost as equity contribution.

Initial request for the extension of the MoU was turned down by the CSCEC on condition that any such decision must be approved by its board.

The foreign firm had also categorically stated that securing the loans for all the projects would be difficult in view of numerous requests for project financing from the Chinese Government from other African countries.
The letter for extension of the MoU was signed by the Group General Manager, Greenfield Refineries Engineering and Technology Directorate, at the NNPC, Mr. Adebayo Ibirogba.

He gave the update of the feasibility studies for the three refineries as follows; that detailed feasibility study for Lagos refinery would take place in July, 2011, pre-feasibility study for Bayelsa refinery in July, 2011 and that of Kogi Refinery in July, 2011. He also stated that detailed feasibility studies for Bayelsa and Kogi refineries as well as executive summary report for all the 3 refineries would be ready in October this year. The corporation also stated that Wood Mackenzie and Foster Wheeler were working as joint Consultants on all 3 reports.

Currently, Nigeria’s four refineries located in Port Harcourt, Warri and Kaduna, with combined capacity to refine 445,000 barrels a day, operate far below their capacity utilisation.

House Speaker: North, S’East Move to Scuttle PDP Zoning Formula

Hon. Dimeji Bankole ,House Speaker

By Kunle Akogun in Abuja and Imam Imam in Lagos

Strong indications emerged Friday night that many members-elect of the House of Representatives particularly those from the North and South-east are working round the clock to defy the Peoples Democratic Party over the choice of a new Speaker by discarding the zoning arrangement earlier agreed upon by the expanded national caucus of the party.

In the meantime, Senate President David Mark Friday inched closer to realising his ambition of again leading the next Senate as his colleagues (serving and incoming) from North-central, where the seat has been zoned, have unanimously endorsed him for the job.
The PDP national caucus had retained the speakership slot in the South-west but  the Northern and South-east members opposing the arrangement are of the view that the zone failed to deliver for the party. Only five of the elected House members from the zone are from PDP.

The South-west endorsed Hon Ajibola Muraina from Ibarapa Central/North, Oyo State for the speakership slot two day ago but that endorsement may pale into insignificance as the general feeling among the lawmakers is to decide the matter on the floor of the House when the seventh National Assembly is convened.

THISDAY learnt that the Northern caucus is of the view that even the election of President Goodluck Jonathan has shown that zoning is no longer sacrosanct in PDP.

The group is also irked by the fact that Muraina endorsed by the South-west was allegedly handpicked by former President Olusegun Obasanjo and may be his lackey.
Already, THISDAY learnt that the Northern caucus is pushing for a Northern candidate as speaker.

At a meeting  Friday night in Abuja  the caucus agreed to put forward a ranking member from the North-west, Hon. Aminu Waziri Tambuwwal, for the exalted office.

Tambuwwal, who is at present deputy chief whip of the House, represents Kebbe/ Tambuwwal Federal Constituency of Sokoto State and has just been elected for a fourth term into the House.

The North-west boasts a strong numerical strength in the House.  Of the total 92 members elected from the North-west, 57 alone are from PDP.

“The Noth-west alone accounts for more than 25 per cent of the House,” a prominent Northern legislators in the House told THISDAY last night.

The position of the North has been strengthened by the feeling of lawmakers from the South-east who feel aggrieved with the zoning of the speaker to the South-west and are now said to be ready to back the North.

Again, the Action Congress of Nigeria which won a majority of the House seats in the South-west and its national leader, Asiwaju Bola Ahmed Tinubu, are said not to be enthusiastic about giving the speakership to the zone given its belief that a PDP man from the zone as speaker may dilute ACN’s strong grip of the South-West.

Sources said the choice of Muraina is also generating anger from senior legislators from the zone elected on the platform of both ACN and the Labour Party.

The choice of Muraina, according to some lawmakers who spoke to THISDAY, does not have the blessing of majority of the members and may force many to support another candidate.

A member representing Maradun/Bakura  federal constituency of Zamfara State, Hon Bello Matawalle, also told THISDAY that unlike what obtains in the past, the present lawmakers will ensure the emergence of credible leaders who will defend the interest of the country at all times.

He said what is of paramount concern to them is the unity, stability and progress of the House.
According to him, the cause of democracy will be better served if they are allowed to select leaders of their choice without any external interference.

Matawalle, who just won election back to the House for the third term, said the collective decision of all members should not be discountenanced on the alter of zoning, adding that external influence on choice of Speaker may likely endanger peace and stability of the House.

The protest launched against the choice of Muraina, according to some members, may help to bolster the chances of Honourable Mulikat Akande Adeola, another PDP member from Oyo State and Deputy Chairman of House Committee on Judiciary.
Speaking to THISDAY on condition of anonymity, a prominent member of the House said extensive consultations is going on with a view to seeking support for Adeola.

"She is the best choice as far as the South-west is concerned. What we need at this point is a leader who can reach out to all Nigerians and who can galvanise members of the House in the service of democracy and development,” he said.
Meanwhile, the senators backing Mark who cut across party lines told newsmen in Abuja yesterday that since Mark is from their zone, they felt obligated to champion his cause.

The senators at the press briefing included Smart Adeyemi (PDP, Kogi), Zainab Kure (PDP, Niger), Suleiman Adokwe (PDP, Nasarawa), Gyang Dantong (PDP, Plateau) as well as Senators-elect Victor Lar (PDP, Plateau), Abdullahi Adamu (PDP, Nasarawa), Joshua Dariye (Labour Party, Plateau) and Philip Aduda (PDP, FCT).

Leading the group at the briefing, Adeyemi submitted that  Mark is the best candidate for the position of president of the incoming Seventh Senate.

He added that so far, not less than 77 senators-elect have endorsed the incumbent for the nation’s No. 3 office.
Also speaking, Senator Kure enumerated Mark’s qualities that make him the best candidate for the post to include intelligence, patience, accommodating and gender sensitivity.

She said that the Sixth session over which Mark presided for four years has been the most peaceful in the country's legislative history.
"Mark's role in steering the ship of the chamber is such that we feel he is unequalled," Kure said, describing him as "a listening Senate President who carries everyone along".

She added that through his doggedness and commitment towards ensuring that Nigeria moves forward, Mark  was able to introduce the "Doctrine of Necessity" that practically took the nation from the brink to which it was pushed by an avoidable constitutional crisis.
On his part, Senator Dariye expressed the belief that Nigeria must go for the best, which Mark currently represents in the Senate.
Dariye, who is going to the Senate on the platform of the Labour Party, said, "if we want the best we must go beyond sentiment of party affiliation". Meanwhile, the inaugural meeting of the Forum of Senators-elect slated for Saturday in Abuja has been postponed.

According to the conveners of the forum, Senators-elect  Ita Enang and Philip Aduda, the postponement was occasioned by the Retreat/Induction programme organised for all elected legislators by the Office of the Clerk of the National Assembly in the various geo-political zones of the federation.

The conveners said consultations would now be held at various venues where the retreat is being held as a prelude to the general meeting.