London — Saudi Arabia is looking to strengthen ties with Africa’s largest oil producer, with state-owned Saudi Aramco studying the possibility of building an oil refinery in Nigeria, as part of an investment agreement, the Nigerian oil ministry said Friday.
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The two OPEC members are set to sign a Memorandum of Understanding (MOU) that will “cover key areas of investment including refinery revamp, building of a brand new refinery, and LNG,” according to an oil ministry statement.
Nigeria’s oil minister Emmanuel Kachikwu visited Riyadh this week where he met with his counterpart Khalid al-Falih and also held meetings with Saudi Aramco CEO Amin Nasser.
“[Saudi oil minister] al-Falih also reiterated the possibility of establishing an independent refinery in Nigeria as the country considers Nigeria as the best hub to reach other African countries,” the ministry said.
An early draft of the MOU will be ready in the first week of May.
Nigeria is hoping to benefit from Saudi Aramco’s recent aggressive oil sector investments.
Saudi Arabia is on a drive to increase its downstream presence internationally. Aramco recently announced plans to build refineries in India, Pakistan and South Africa.
Nigeria is in urgent need of investment to revamp its ailing refining sector, with Africa’s biggest oil producer wholly dependent on imports to meet its local fuel needs due to inadequate domestic refining capacity.
Nigeria has been courting Middle Eastern nations to help develop its refining sector, to bolster local fuel supplies and end imports.
Nigeria’s four refineries, which have a combined capacity of 445,000 b/d, have operated sporadically mainly due to sabotage on pipelines carrying crude to the plants and technical problems after years of neglect.
