Investors can shock Dangote if they buy, relocate closed refineries from Europe
Energy analysts have started assessing the possible business imports of the projected closures of refineries in Europe at a time local refining capacity has remained inadequate.
Some industry experts who barred their minds with our correspondents in Lagos argued that the trending closures of European refineries due to dropping demand for fossil fuel products can in essence become a blessing in disguise if Nigerian investors can decide to buy over clean ones and relocate them down to Nigeria for maximum use.
They hinted that due to the circumstances surrounding the closures which include poor market, demand and regional shift to renewable energy, their prices may be cheaper than brand new refineries from China or India after all.
They are of the opinion that given the possibility of some Nigerians venturing into the buy and relocate business model, they may give Dangote refinery a stiff competition which will be healthy for the Nigerian refinery industry expected to have only Dangote as sole well function installed capacity producing plant.
The energy analysts noted that one of the best bets for investors looking at modular refineries is to merge and go for closed European refineries, saying the advantages over modular refineries are enormous including larger outputs, clean fuel, cheapness and time saving.
For example all the 43 modular refineries licensees can form mergers and go for the European refineries which can give seamless advantages over modular refineries.
They disclosed that one of the things the investors can do while relocating the refineries will be to within the process bring in fabrication reforms that may even raise the original production outputs and further replace fabrications and components that are under the influence of tears and wears.
Already, there are strong indications that owners of the European refineries that are facing poor market may wish to relocate them to economies where petroleum products are still preferred to alternative energy sources like Nigeria and many sub-Saharan Africa.
Only recently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru gave an insight of government’s plan to explore buy-over of closed European refineries to close the import gap currently terrorizing the economy in terms of rising landing costs and subsidy controversies.
According to him, Nigeria’ll benefit from refinery closures in Europe.
He revealed that the projected closures of some refineries in advanced economies imply that there will likely be a relocation of refining operations from those countries to areas of higher demand for petroleum products like Nigeria.
Statistics show that of the Europe’s 104 refineries, a lot will be shut permanently by 2020 from France to Italy to the Czech Republic, a Bloomberg survey of six European refinery executives showed.
Already, in EU, oil consumption is headed for a fifth year of declines to the lowest level since 1994, the International Energy Agency (IEA) estimates. Two-thirds of European refineries lost money in last few years, according to Essar Energy Plc, owner of the U.K.’s second-largest plant.
