Nigeria has signed a $4.5 billion refinery deal that could boost the country in to the oil production big league.
Nigeria is already Africa’s leading oil producer, but production is choked by a lack of capacity that means the oil has to be shipped abroad for refining.
The deal could ease the problem by seeing up to six new refineries come on line that can handle an extra 180,000 barrels a day.
Nigeria would see supply costs drop while oil flow overseas increases.
The government has signed an in principle contract with US firm Vulcan petroleum to build the refineries as a joint venture.
“This is the beginning of changing our old paradigm of exporting just raw materials and exporting jobs to Western countries,” said Nigeria’s Trade and Investment Minister Olusegun Aganga.
The agreement proposes the first two refineries will open within a year.
Vulcan vice-president Jim Mansfield explained the agreement confirmed Nigeria as a viable investment destination.
“The funding for the project will be a non-Nigeria source and is from investors who firmly believe that Nigeria is a good place to do business,” he said.
Meanwhile, Nigerian President Goodluck Jonathan fired several key players at the state oil company NNPC after a fraud inquiry revealed $6.8 billion was missing from the company’s bank accounts.
The fraud investigation followed a angry clashes when the government revoked a fuel subsidy that cost $8 billion in 2011 alone.
Investigators found the government paid out millions more in subsidies than fuel used in the country.
Nigeria is the world’s eighth largest oil producer with an output of 2 million barrels a day.
