- The Nigerian government and Saudi Arabia are finalizing plans to seal a refinery repair deal
- The deal, if consummated, will see Saudi Arabia fixing the four refineries in about two years
- Also, the Saudi government promised to inject foreign exchange into Nigeria's external reserves
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Nigerian government is pursuing its refinery repair deal with Saudi Arabia as industry analysts express reservations.
The deals included a promise by Saudi Officials to fix Nigeria's four ailing refineries, which have not worked for years, leading to the country relying on petrol imports.
Saudi Arabia government to fix Nigeria's refineries in 2 years
The Nigerian government says it will finalize the deal's details with the Kingdom in six months.
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Nigeria could process about 450,000 barrels of crude oil daily from the refineries.
Experts are optimistic that deals reached last week with Saudi authorities will enhance local production and aid the economy.
Leadership reports that the agreement between the two countries was made on the sidelines of the first Saudi-Africa Summit in Riyadh.
Nigeria's president, Bola Tinubu, met with Saudi Crown Prince Mohammed Salman as part of efforts to attract investors to boost Nigeria's economy.
The Saudi government reportedly promised to repair Nigeria's four refineries in Rivers, Kaduna, and Delta states, which have remained moribund for years.
Government officials who spoke to journalists at the summit said the refinery repairs will take about two years.
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Deal to boost foreign exchange reserves
Also, Saudi Arabia has promised to deposit large sums of Forex to boost Nigeria's falling reserves, exacerbated by the naira devaluation in June this year, as part of efforts to unify the exchange rates.
President Tinubu removed the decade-long chaotic petrol subsidy when he assumed office to attract investments into the petroleum sector.
The move has caused a spike in the prices of petrol in Nigeria, which experts say led to the urgency to refine petrol locally.
Energy policy analyst and Team Lead of Platforms Africa, Adeola Yusuf, told Legit.ng that the deal with the Saudi authorities is strategic because it comes with benefits.
He said if it works out, Nigeria will benefit in terms of Forex injected into the economy and having its refineries fixed.
"The federal government should approach the deal cautiously because it is a lifetime opportunity.
"They are coming to fix the refineries and at the same time inject Forex into the economy. The deal is supposed to be juicy if handled with care.
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The country pledged a bilateral engagement between President Bola Tinubu and Crown Prince Mohammed Bin Salman.
The Minister of Information and National Orientation, Mohammed Idris, disclosed this in a press statement.