DMEA: NNPC launches greenfield subsidiary

This week’s DMEA covers the launch of an NNPC subsidiary to oversee the establishment and operation of new refineries in Nigeria and Japan’s funding for a major Iraqi project.

State-owned NNPC appointed the board of Nigerian Greenfield Refinery Ltd (NGRL), with the parent firm’s managing director, Mele Kyari, challenging them to bring an end to the country’s reliance on refined product imports.

Kyari said: “As a business, this is a big opportunity for us and this company's balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So there is really no excuse.”

He added that it was imperative that the country takes control of processing its own crude. “Our company must grow and we can't do well except [when] we are able to process our production, whether it is the liquid or gas. If we don't monetise it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.

Meanwhile, Japan this week formalised a previous agreement to provide a low-interest loan to Iraq for the Basra Refinery Upgrading Project (BRUP), on which work began earlier this year.

Speaking with his Iraqi counterpart during a meeting in Baghdad this week, Japanese Foreign Minister Toshimitsu Motegi said that Tokyo would extend up to $300mn in loans to assist with the project, which will increase refining capacity from the current 210,000 barrels per day to 280,000 bpd.

Funding will be provided by the Japan International Cooperation Agency (JICA) and follows a mid-2019 agreement with Iraq’s Ministry of Finance for a $1bn loan to upgrade the refinery, which was built in the 1970s.

In October last year, state-owned South Refineries Co. (SRC) awarded a $3.75bn engineering, procurement and construction (EPC) to Japan’s JGC to build a new fluid catalytic cracking (FCC) complex on land adjacent to the existing refinery at Shuaiba.