Why Private Sector Shuns Building Refineries – Consultant

A consultant in oil and gas, Mr. anthony Thompson, last Thursday said that private investors were no longer interested in building refineries in Nigeria but to export crude oil abroad.

Thompson told newsmen in Lagos that this was so because exportation of crude oil was more profitable.

According to him, refining business is no longer attractive to multinationals because of the huge profit they earned from the sale of crude at the international market.

Thompson, who is a Managing Partner in OL Konnect Consult, said that the abundance of refineries in the U. S. and Europe had made multinationals to concentrate on exportation of crude.

“The multinationals concentrate on exportation of crude to feed refineries in their home countries rather than investing in refineries that will not yield the expected profits.

“The oil and gas technology has reduced the risk of carrying crude and when you drill your well the profit is so huge when compared to when you refining.

“Many of such investors have left Africa; even in Europe they have left. They have given up on the downstream,’’ he said.

Thompson said that the poor enabling environment in the country was also not encouraging investors, who he said, were now diverting to the gas sector.

“Nigeria has huge resources of gas that is yet to be tapped. Government should provide the enabling environment to unlock the economic potential of the sector,’’ he said.