In a US$23.8 bln deal, China State Construction Engineering Corp. Ltd. and Nigerian National Petroleum Corp. - Nigeria's state-run oil company have inked a memorandum of understanding to create three oil refineries and a petrochemical plant. The three refineries are being planned in the states of Bayelsa, Kogi and Lagos, while location of the petrochemical complex has yet to be confirmed. Production capacity of 250,000 bpd is being planned at each of the refineries. Funding is expected from a consortium of Chinese banks, including China's Export and Credit Insurance Corp. and China's Export-Import Bank, to be repaid from the refinery production stream. Until the loans are repaid, the Chinese will manage the refineries that will meet the domestic requirements of the world's 12th-largest oil producer and the eighth-largest oil exporter. Interestingly, about 85% of Nigeria’s fuel needs are imported because of the crumbling state of its four state-owned refineries.
A feasibility study is expected, but skeptics doubt the success of this project that involves an enormous investment in a politically unstable country. As per statistics, barely 2-4% of MOUs lead to projects in Africa.