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Nigeria signs $741 million oil deal with South Korean engineering firm

February 3rd 2023, 7:55:16 am
NNPC increases gas supply to power sector by 19%. [thebridgenewsng]
  • Nigerian National Petroleum Company (NNPC) Limited and a South Korean engineering firm have agreed to a $741 million maintenance service contract.
  • The South Korean company is Daewoo Engineering and Construction Company Limited (KRPC).
  • The new deal is set to buff up Nigeria’s production capacity by about 60%.

For a quick fix repair of Kaduna Refinery and Petroleum Company, the Nigerian National Petroleum Company (NNPC) Limited has inked a $741 million maintenance service contract with a South Korean engineering company, Daewoo Engineering and Construction Company Limited (KRPC).

In a statement issued by the NNPC, it was revealed that the signing ceremony took place on Thursday at the NNPC Towers in Abuja.

The start of operations at the 60,000 barrel-per-day Port Harcourt refinery has been delayed from December 2022 to the first quarter of 2023, the federal government stated a few weeks prior.

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The current agreement is a component of the federal government's efforts to lessen Nigeria's excessive reliance on petroleum imports, which is a major cause of embarrassment for a nation that is Africa's top crude oil producer.

According to the conditions of the agreement, the NNPC stated that Daewoo must increase production at the idle 110,000 barrels per day facility to at least 60% of its capacity by the end of 2024.

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Because of the burden on the nation's foreign exchange, the NNPC now imports all of Nigeria's gasoline requirements, primarily through crude for fuel swaps with local and international traders.

According to the state-owned oil firm, the NNPC anticipates funding Daewoo's "quick-fix" turnaround work at the Kaduna Refinery and Petrochemical complex, which was commissioned in 1980, using a combination of its own earnings and outside financing.

On a side note, the federal government disclosed that it had purchased shares in 4 private refineries operating in various regions of the country as part of its plans to ensure energy security. The refineries on the list include the 2,500 barrels per day Duport Modular Refinery in Edo, the 5,000 barrels per day Waltersmith Modular Refinery in Imo, and the 650,000 barrels per day integrated Dangote Refinery in Lagos.

Chinedu Okafor
Chinedu is a Senior Reporter at Business Insider Africa with 5 years experience creating profoundly engaging and insightful content.

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