In a significant move to enhance Nigeria’s refining capacity and boost foreign exchange earnings, the Nigerian Content Development and Monitoring Board (NCDMB) has acquired a 20 percent equity stake in a 100,000 barrels per day (bpd) refinery project – such a positive moment that has been going on for a few days now. 

The President of Nigeria, Bola Tinubu, since he took up the reins in May 2023, has had his eyes set on increasing the country’s output, be it when it concerns premium motor spirit, diesel, jet fuel or gas. This initiative, developed by the African Refinery Group Ltd in collaboration with the Nigerian National Petroleum Company (NNPC Ltd), aligns with that strategic goal of achieving adequate domestic refining capacity while generating substantial revenue through exports.

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The share purchase agreement for this investment was signed on Thursday, marking a pivotal milestone for the NCDMB under the leadership of its Executive Secretary, Engr. Felix Omatsola Ogbe. The signing ceremony took place at the Board’s liaison office in Abuja, the Federal Capital Territory, with Mr. Tosin Adebajo, Managing Director of African Refinery Port Harcourt Limited (ARPHL), signing on behalf of the company.

According to an NCDMB press notice, the refinery project will be co-located with the Port Harcourt Refining Company Limited, operated by NNPC Ltd, in Alesa Eleme, Rivers State.

Engr. Ogbe emphasised that this equity investment is the first of its kind under his leadership, reflecting the Board’s commitment to thorough technical, commercial, and regulatory reviews in line with its Commercial Ventures Investment Policy.

He assured that the Board has established a robust corporate governance procedure to safeguard its investment and ensure the refinery project’s optimal performance.

The NCDMB’s investment is part of its broader commercial venture programme, supported by section 70 (h) of the NOGICD Act, which mandates the Board to assist local contractors and Nigerian companies in developing their capabilities.

Using the ARPHL project, the Board aims to support the Federal Government’s strategic policies, create job opportunities during the construction and operation phases, and add value to Nigeria’s hydrocarbon resources.

The shares for the ARPHL project were acquired under the Nigerian Content Intervention Company LTD/GTE, a company wholly owned by the NCDMB.

Details of the investment reveal that NNPC Ltd holds a 15 percent equity stake in the refinery, having executed a share subscription agreement in 2024.

The African Refinery Group won a competitive bid in 2016 to co-locate a crude oil refinery within the Port Harcourt Refinery Complex (PHRC). The agreement grants the company a 64-year sub-lease on 45.466 hectares of land within the refinery complex.

According to the investment plan, NCDMB will divest its stake in the refinery at the end of the seventh year from the commercial operations date.

The Board’s portfolio of refining investments also includes the Waltersmith 5,000 bpd modular refinery in Imo State, Azikel Group’s 12,000 bpd hydro-skimming modular refinery in Bayelsa State, and Duport Midstream’s 2,500 bpd modular refinery in Edo State. These projects are at various stages of operation and development.

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The Waltersmith modular refinery, for instance, has proven to be a commercial success, generating significant profits and dividends. In 2023, Waltersmith Refinery and Petrochemical Company Limited posted a profit after tax figure of ₦23.6 billion and declared a total dividend of ₦4.5 billion, pending final approval at the Annual General Meeting (AGM).

NCDMB holds a 30 percent share in the company and received an interim dividend payment of ₦450 million out of the ₦1.5 billion declared for the year that ended in 2023.

The acquisition of a 20 percent equity stake in the ARPHL project sums up NCDMB’s strategic approach to fostering Nigerian content in the oil and gas industry.

By bolstering domestic refining capacity and positioning Nigeria as a significant player in the global refining market, the NCDMB aims to generate substantial income and foreign exchange, mirroring the success of the Dangote Oil Refinery so far.

As the ARPHL project progresses, it is poised to contribute significantly to Nigeria’s energy security, economic growth, and the creation of thousands of direct and indirect jobs. This investment represents a critical step towards realising the country’s vision of self-sufficiency in petroleum product refining and export.

Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.