April 16, 2024

Marketers call for floating of $15bn Energy Bank to fund productive ventures in Downstream oil sector

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Adewale Akintaro

Oil marketers under the umbrella of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have made a case for the federal government and other critical stakeholders to consider setting up the Energy Bank of Nigeria (EBN) to foster the funding of productive ventures in the downstream oil sector such as refineries.

The National President of PETROAN, Dr Billy Gillis-Harry made the call on behalf of his members during an exclusive chat with a news daily ( not EnergyDay) adding that the energy bank should be funded to the tune of $15 billion at the minimum to be able to cater to the funding needs of players in the oil and gas industry.

He hinted that his association was in discussions with three foreign oil refiners from the United States, Kazakhstan and Asia to partner it in building a new refinery in Nigeria, with the federal government expected to support the project with some form of sovereign guarantee.

Gillis-Harry explained that setting up the energy bank in Nigeria would enable marketers like PETROAN members to embark on projects that are more beneficial to the country’s economy by enhancing production in key sectors like the petroleum downstream and midstream sector.He said his association had communicated their advocacy to President Bola Tinubu on the need to have the energy bank in the country, noting that that bank had become critical for the country.

He said: “It’s not like marketers are not interested in making efforts in building refineries. We are willing and we need some supports. That is why we advocate that government should set up the Energy Bank of Nigeria and fund it at least to the tune of $15 billion so that such ventures can also be funded. So, just like the Bank of Industry, Bank of Agriculture, we should have an Energy Bank of Nigeria.“We have communicated to the president and we are hoping to have interaction with him on this issue. But everybody has seen the need for setting up that energy bank.

“We are talking to the National Assembly, we are talking to the State Assemblies, we are talking to stakeholders in the business, and PETROAN is the one championing it. So, we hope that our members can make their minimal contribution on equity basis in Nigerian naira.”He said having that energy bank working in Nigeria would help to build confidence among foreign investors and multilateral financial institutions like the African Development Bank (AfDB) who would want to invest in the country.

He argued that the energy bank of Nigeria would act as a local institution that will warehouse and safeguard any kind of investment coming into the country.With the bank established and functioning in the country, the PETROAN boss said it would become easier for them to start carrying out productive projects in the downstream oil sector.

He said lack of access to funding, coupled with the low capital outlay of marketers have made it difficult for them to build a refinery.According to him, to build a refinery of about 50,000 barrels per day as of today requires building a minimum capital outlay of over $3 billion.

Gillis-Harry stressed: “How many marketers in Nigeria have $3 billion as their capital base? 50,000 barrels per day refinery will be able to bring at least about 700,000 litres of Premium Motor Spirit (PMS), some diesel, some kerosene, some aviation fuel.

“The cost of building a 50,000 barrels per day refinery will even be much more than $3 billion, and so you need that kind of money. Where are you going to get it?#8221;.

On the current move to build new refinery, championed by PETROAN, he said the government needed to support the idea, explaining that that informed their request for partnership with the government as they already have foreign partners that are willing to invest in the project.

He specifically revealed that PETROAN is already discussing with three refineries abroad to give them technical and financial support to be able to build a refinery in Nigeria.

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