BUA Group has strengthened its conglomerate by diversifying into oil and gas, Daily Times gathered. It signed a deal with France’s largest hydrocarbons group, Axens, who will now refine 200,000 barrels per day of crude oil in the country. the project would be located in Akwa Ibom state.
In the contract that was signed between both parties in France on Tuesday, the French hydrocarbon giant will license key refinery technologies to BUA Group, one of Nigeria’s leading industrial conglomerates.
Chairman of BUA Group, Mr. Abdulsamad Rabiu, who signed on behalf of the company, said the viability of the project was assured, given the economics of fuel importation in the country.
According to The Africa Report, the Chairman said, “Nigeria imports 90 per cent of its petroleum products. We spend 35 per cent of our foreign exchange on importing petroleum products,”
The new refinery, with a capacity to produce 200,000 barrels per day (bpd), 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 contract was signed in Paris between Rabiu and the CEO of Axens, Jean Sentenac, at a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.
Axens got a better of the US company, Honeywell UOP, which couldn’t close the deal, according to credible sources.
“President Macron has given special determination and support to this project,” Rabiu told The Africa Report.
Rabiu has been made Chairman of the Macron-initiated Franco-Nigerian Investors’ Club.
In his comments, Sentenac said the technologies that Axens is licencing would give the country the chance to breathe easier, with the plant having the ability to refine biofuels.
“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 said.
Rabiu noted that BUA Group is obsessed with sustainability and building fro the future.
“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,” he said.
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 project sets up a direct competition with Nigeria’s other large refinery project, piloted by the Dangote Group, which would be operational by 2021.
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.
This is partly because of the projection for fuel use in Nigeria itself as the country today consumes about 500,000 to 550,000 barrels a day of petrol and partly because of demand in the region.
“We will have the marine infrastructure for easy export,” said Rabiu, “and the external market for polypropylene (the other major product from the refinery) is very strong.”