LAGOS, AUGUST 7, 2017 – Nigeria’s Forte Oil said on Friday it was in talks with a major refinery to form a strategic partnership for local refining of petroleum products in Africa’s top oil exporter, its chief executive said.
Nigeria has been pushing to refurbish its decrepit refineries, as the country is still mainly dependent on exporting crude oil for imports of refined products.
It has also been seeking new investments to reduce reliance on imported oil products that consume a large portion of the OPEC member’s scarce foreign currency reserves, especially with oil prices low.
CEO Akin Akinfemiwa said Forte Oil, majority owned by billionaire Femi Otedola, was exploring partnerships and joint ventures for local refining of petroleum products.
Nigeria’s oil minister has said its existing, ageing refineries have a daily domestic refining capacity of 6 million litres, while the daily consumption stands at 35 million.
“We are aggressively pursuing M&A opportunities along the energy value chain,” Akinfemiwa told investors in Lagos.
He said the company, with interests in fuel distribution and power, would diversify into the upstream sector through acquisition of marginal oilfields.
Shares in Forte rose 4.99 percent on Friday to 60.37 naira, giving it a market value of 78.6 billion naira ($216 million). Its shares have fallen 32 percent this year, adding to a 74 percent fall last year.
Nigeria’s presidency said on Thursday it will legalise currently outlawed mini-refineries in its Niger-Delta oil hub by the end of the year and supply them with crude at reasonable price, a move which could boost local refining.
In May, rival energy group Oando Plc said it was in talks to work with Italian energy company Eni to rehabilitate the Port Harcourt refinery, one of the West African nation’s four refineries.
Africa’s richest man Aliko Dangote is building an $17 billion oil refinery with a capacity of around 650,000 barrels a day, planned to start operation by 2019.
Forte Oil this week reported an 11.3 percent rise in half-year pretax profit to 4.74 billion naira.