The Hindu Business Line : Nigeria invites IOC to invest in grassroots refinery

Mr Edmund Daukoru cautioned IOC saying, "There is an entry window now but it will be open only for a short while. Our production is finite and the opportunity should be taken when it is open."

LURING INVESTMENT: The Minister for Petroleum and Natural Gas, Mr Murli Deora, with the Nigerian Minister of Petroleum and former President of the Organisation of Petroleum Exporting Countries (OPEC), Mr Edmund Daukoru, in the Capital on Tuesday. Mr Daukoru was here to attend the Petrotech-2007 meeting. - Ramesh Sharma

New Delhi , Jan. 16

Nigeria has invited Indian Oil Corporation (IOC) to invest in new grassroots refineries in that country. "IOC is interested in the Port Harcourt refinery put up for sale but we also want it to look at grassroots refinery possibility," said Mr Edmund Daukoru, Nigerian Oil Minister.

"We have targeted to refine 70 per cent of our domestic oil production by 2010 from less than 40 per cent now and we want to encourage 100 per cent private-owned investment in grassroots refineries for this purpose," Mr Daukoru said.

The invitation was made in a closed-door meeting between the Nigerian delegation led by Mr Daukoru and a delegation led by Mr Murli Deora, Minister for Petroleum and Natural Gas, which included the Petroleum Secretary, Mr M.S. Srinivasan, Mr Sarthak Behuria, Chairman, IOC and Mr R.S. Sharma, Chairman, ONGC.

However, Mr Daukoru cautioned IOC saying, "There is an entry window now but it will be open only for a short while. Our production is finite and the opportunity should be taken when it is open."

Nigeria has also invited Indian companies to invest in other industries apart from oil and gas. "We would like to encourage Indian companies to invest in fertiliser plants that can monetise gas, put up gas transportation infrastructure and also invest in LNG projects," Mr Daukoru said.

IOC has evinced interest in picking up equity in an LNG liquefaction facility but discussions are at an early stage. Meanwhile, the Nigerian Oil Minister said that it is considering India's request for increasing its allotment in the term contract for crude oil from two to three million tonnes per annum. "But this will be possible only when our production is restored to normal and touches three million barrels a day," Mr Daukoru said.

To watch oil prices

Nigeria on Tuesday said OPEC would wait and see the effects of its February crude supply cuts before deciding on any further reductions. Mr Daukoru maintained that the market was substantially over-supplied.

He said that there was no emergency meeting planned of the Organisation of Petroleum Exporting Countries (OPEC) before February to decide on another round of cuts as global crude prices tumbled about 15 per cent since the beginning of 2007 to around $52 a barrel.

Mr Daukoru said: "Prices should be supportive of investment in exploration. While prices are coming down, development cost isn't. Low prices will discourage investment in exploration and development," he said refusing to comment on whether the current price was fair.

"The price that is discovered when supply and demand is in balance is the equilibrium price. Presently, there is an oversupply," he said.

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