The Bayelsa State Government has signed a Memorandum of Understanding, MoU, with Rehoboth refinery for the construction of 60,000 barrels per day modular refinery.
The plant is targeted at increasing the nation’s refining capacity to grow its economy and local refining.
Addressing newsmen after the signing in Lagos, Commissioner for Trade, Industry and Investment, Bayelsa State, Kemela Okara, said the partnership was to signal the federal and state governments’ commitment toward providing an enabling environment for private investment.
He said: “As state government, our fundamental role is to do everything possible and ensure the private sector does what it does best. The milestones and efforts Rehoboth has made over the years in ensuring that the modular project can be kicked-off is quite remarkable. On our part, we thought it best to signal our commitment by signing the MoU.
“The Governor of Bayelsa State, Seriake Dickson, has consistently signalled his commitment and that of the state to attracting investors into the state, especially in areas where we have comparative economic advantage and in that light, the steps we are taking will signal to private investors that Bayelsa State is friendly and ready to collaborate with investors.
“We have taken a classic state government role. Also, the state has a state level industrial policy and in partnership with United Nations Industrial Development Organisation and we came up with a state government industry policy.”
Enabling environment
He, however, added that the state government was not necessarily supporting the project financially, “but doing everything possible to create an enabling environment as well as pushing for the kick-start of the project. It means we have a little equity in the project going forward.
“We want to make sure that they succeed and in light of the government policy, the project sees the light of day.
Project to cost $120m
In his remark, Chief Executive Office, CEO, Rehoboth refinery, Joe Attueyi, explained that the project, on completion, would cost about $120 million and was to be ready within the space of 18 months or two years.
According to him, “We have come with a positive mindset to build the project because we believe that partnership creates value.
Also, we thought of partnering the communities if we must have a successful business.”We went to purchase the land from the community and paid to the community, and today they are friends.
The company believes that it is beyond building a 60,000bpd refinery, but we are looking to create value for the community, the state and general economy of Nigeria. We have gone far and have been approved by the regulatory body, while the state government has facilitated the acquisition of our land occupancy.
“Currently, equity capital has been raised for the project and it remains the debt size which is about 60 per cent of that value and we have indicating offer for that debts, which we are working to finalize and putting some guarantee in place.
“We had earlier started with a first phase of 12,000 bpd and that was the initial license to establish, at $120 million for the project. However, it needs certain incentives from the Federal Government, which Bayelsa is supporting us to achieve.
“The project is scheduled for 18 months and six months for contingencies. The problem is that we don’t know when we would get the government incentives to close and the local banks are not ready to finance projects of such nature.”