March 25 (Lagos) - In a bid to trim down the country’s petroleum importation bill, the Nigerian National Petroleum Corporation (NNPC) has inked a $50 million-dollar contract with an Italian firm, Maire Tecnimont to overhaul the 210,000 b/d Port Harcourt refinery plant.
The NNPC asserted that this would be the first overhaul of the Port Harcourt refinery since the last revamp was carried out 19 years ago. Maire Tecnimont will commence maintenance operations by the end of March and the entire overhaul is expected to last for six months, following comments revealed by the Corporation.
The refinery is expected to reach 60% capacity utilization at the end of the first phase, increasing to 90% after completion. While we think this is a positive development for Nigeria’s oil and gas industry as it can help the government save funds spent on imports, we are not quite optimistic about its impact, given the history of rapidly declining capacity utilization after an overhaul.
Fixed Income: We expect the bond market to start this week quiet, as investors await the MPC announcement on Tuesday and the bond auction scheduled for Wednesday.
Also, we expect mild demand in the T-bills market in the likely absence of an OMO auction at week start.
reporting for easykobo.com on Monday, March 25 2019 from Lagos, Nigeria
Source - analysts at Vetiva Capital Management Ltd in Victoria island, Lagos. All opinions expressed in this article are those of analysts at Vetiva.