SHELL Petroleum Development Company (SPDC) on Wednesday confirmed its decision not to invest in the building of refineries in Nigeria.
Mr. Mike Mullier, Global Leader (Crude Trading) in SPDC, disclosed this to newsmen after presenting a paper at the ongoing Africa Energy Week in Accra, Ghana, saying Shell was no longer considering investing in crude processing.
He said the company’s downstream portfolio was already saturated thereby dashing the hope of fresh investment in Nigeria that ranks as the 6th largest oil producer in Africa and the first in Africa.
The SPDC official blamed the development on the low returns on such investments as African governments were regulating prices of petroleum products.
According to him, the company’s investment direction is currently focused on highly profitable areas that offer growth opportunities and adequate returns.
Mullier’s statement may have sealed hopes of visible private investment in domestic refining in Nigeria.
Shell is Nigeria’s biggest petroleum industry operator and produces nearly half of the country’s 2.5 million barrels per day.
Shell has joint venture and production sharing agreements with the Nigerian National Petroleum Corporation (NNPC).
The Moment investigations revealed that Nigeria, despite its position as the largest oil producer in Africa still imports fuel from abroad as the four refineries with Capacity of 445,000 barrels cannot meet national demand for premium motor spirit, PMS, otherwise known as petrol, which is over 33 million litres daily.
The inability of local refineries to meet national demand forced NNPC and few oil marketers to embark on fuel importation.
Government also awarded 22 approvals in principle licences for the building of new refineries, but the licences were revoked due to the failure of the prospective promoters to honour the deal of starting the projects.
All the multinational oil firms operating in the country have never indicated any interest in building new refineries in the country due to the regulation of the official pump prices of fuel by the government .