A leading Nigerian conglomerate with focus on manufacturing, infrastructure and agriculture, BUA Group, has ventured into oil and gas sector and signed a deal with France’s largest hydrocarbons group, Axens, to refine 200,000 barrels per day of crude oil in Nigeria.
Located in Akwa Ibom State, South-south Nigeria, the project is expected to see Axens license key refinery technologies to BUA Group. This was contained in a contract that was signed between both parties in France on Tuesday.
Chairman of BUA Group, Abdulsamad Rabiu, signed on behalf of his company, while the Chief Executive Officer of Axens, Jean Sentenac, did same at a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.
Speaking after signing the contract, Rabiu described the project as a very viable one given the economics of fuel importation in Nigeria.
“Nigeria imports 90 per cent of its petroleum products. We spend 35 per cent of our foreign exchange on importing petroleum products.
“President Emmanuel Macron has given special determination and support to this project,” Rabiu told The Africa Report.
BUA Group chairman expressed belief in the project’s sustainability, noting that the investment would pay off in the long run, as new fuel standards continue to evolve along with the climate crisis.
According to him, “It is in the DNA of BUA Group; look at our cement plants, the most sustainable in Nigeria, same with our sugar plants. This is the hard part, we cannot get this wrong. It is like in an aeroplane, you always look at who built the engine, it is the most important thing.”
Rabiu said there’s space for another project, despite the growing international glut of refinery projects, the tapering of transport fuel use globally and the strong local competition.
His projection was based on the high rate of fuel consumption in Nigeria, saying the country today consumes about 500,000 to 550,000 barrels a day of petrol and partly because of demand in the region.
He said: “We will have the marine infrastructure for easy export, and the external market for polypropylene (the other major product from the refinery) is very strong.”
Rabiu has been serving as the Chairman of the Macron-initiated Franco-Nigerian Investors’ Club.
Also speaking, Sentenac described the technologies that Axens would be licencing as a chance to breathe easier in Nigeria, with the plant having the ability to refine biofuels.
Sentenac said: “We are the world leader in the Euro 5 fuel standard; this has already reduced car pollution in Europe by a factor of 5 or 6, and it also allows Nigeria to start using the latest generation of fuel efficient engines, the first step towards fighting global warming.”
He added that his company, which makes systems to convert oil and biomass to cleaner fuels, would provide technology for the greenfield project designed to produce Euro-V fuels and polypropylene targeted at domestic and regional markets.
In his remarks, Riester said the deal would be “one of the things that will help build up the necessary intrapersonal relationships” between industrial players in the two countries, part of a wider French strategy of greater engagement in Anglophone Africa.”
The new refinery is expected to be operational in 2024. The refinery would be built using an undisclosed mix of debt and equity, with several development and commercial banks in negotiations with BUA Group.
The new project is expected to directly compete with Nigeria’s other large refinery project, piloted by Dangote Group, which would be operational by 2021.
Axens beat the US company, Honeywell UOP, which got through to the final round, according to sources close to the bid.
The bidding process was managed by energy consultants, KBR, which would also be handling subsequent rounds for the engineering and construction phase, currently underway.