Nigeria’s financing pattern before and after independence: ”north” did not build the oil industry – Shell and the FG did.... Exploration for crude petroleum oil in Nigeria first began in 1908. However, serious and sustained efforts did not happen until Shell Darcy Petroleum Company commenced operations in 1935. It took this company more than 20 years to discover petroleum crude oil in commercial quantities in Oloibiri in 1956. Before 1965, all the international petroleum marketing companies in Nigeria imported their stocks independently from their own refineries located abroad. As the local demand grew for these products, and following the local availability of crude oil by pipeline, establishment of a refinery in Nigeria became commercially viable.. Two oil marketing companies in Nigeria , Shell and British Petroleum, BP, formed a 50/50 joint venture refining company in Nigeria , the Nigerian Petroleum Refining (NPRC) in 1960. The NPRC built a 38,000b/d petroleum refinery at Alesa-Eleme, near Port Harcourt to refine local crude oil into five petroleum fuel products. Construction of the refinery commenced in 1963 and production started two years later, in 1965. Crude oil processed in the NPRC refinery was a portion of the production destined for export through Shell-BP’s Bonny Island export terminal. By a special contract agreement among all the five major products marketing companies, they procured crude oil from Shell-BP.. The crude oil was transported by pipeline to the NPRC Refinery for processing based on the quantity processed, at an agreed unit price per ton of crude oil. The major marketers also, at their own cost, arranged the timely evacuation of the products from the refinery, mostly by the sea to Lagos and the remaining by road tankers.. The refinery was de-bottlenecked in 1973, in order to increase its crude oil processing capacity from 38,000b/d to 60,000b/d. The domestic demand for petroleum products which steadily increased was satisfied by the NPRC refinery for about 8 to 10 years. In 1970, the Federal Government acting as a member of OPEC compulsorily acquired and paid for an equity share of 60 percent in all private international companies working in the Upstream and Downstream sectors of the Petroleum Industry in the country. The Federal Government invested these shares in its wholly owned corporation, the Nigerian National Oil Corporation, NNOC.. NPRC was one of such companies whose shares were compulsorily acquired by government. NPRC was allowed to continue to operate commercially and profitably, without any interference from government. The Federal Government participated only at the board, represented by NNOC, as the majority shareholder. NPRC paid dividends regularly to its shareholders. The refinery was adequately maintained and achieved its production targets efficiently and safely
Posted on: Tue, 08 Jul 2014 09:43:49 +0000
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