Oil sector and business plan for a 250,000 bbls/day refinery project in Nigeria

Since the 1960’s Nigeria has fought for World Wide market presence in many ways and with the exception of being a major crude oil exporter, other industries such as steel, coal, manufactured goods and agricultural products have all been relatively unsuccessful. AC OIL&GAS Investments Limited has created a platform for three viable and symbiotic businesses that are believed will contribute to revolutionizing the Nigerian economy and for the first time in Nigeria’s history establish it as an export nation.

The platforms or business ventures will primarily use source materials; oil and gas, both these base feed-stocks are readily available and have been given prioritized access for companies wishing to set up and operate downstream processing industries in the oil and gas industry. The Federal Government has put in place the guarantee of feed-stocks, tax and duty holidays for start-ups, the freedom of repatriating foreign capital, investment and operating profits along with a plethora of minor incentives that are targeted assist capital developments that produce employment, reduce imports and are most likely to reduce the country’s balance of payments. Presently there are five refineries in Nigeria with an installed capacity of approximately 450,000 BPSD of crude oil per stream day. The four government refineries are, however faced with many problems in that they only produce 10% to 20% of the domestic demand and until recently it was little more than 30%. The fifth refinery is a 1,000 BOPD diesel stripping refinery producing from a small production lease in Rivers State.

As an example, the total historical combined capacity of four government refineries was only 20% capacity and even in 2,000 the country imported about 70% of the domestic demand of about 11 billion litres this represented a huge drain on Federal resources, particularly since to date, a subsidy regime has been in place.It is inevitable that the government refineries in Nigeria become privatized at some time. The huge investment inflow arising from the importation of refined products will then reduce and cushion the pressures on the Nigerian economy and currency. In due course, there might be an appreciation of the Nigerian currency. The intention of AC OIL&GAS Refineries Limited is to develop a refinery to process 250,000 BPSD of crude oil. This report explains the Oil sector in Nigeria and a complete business plan for a standard 250,000 bbls/day refinery.