Reps To Investigate $1.5bn Port Harcourt Refinery Rehabilitation Cost

File photo of some members of the House of Representatives during plenary on April 28, 2020. Photo: Twitter- @HouseNGR

 

The House of Representatives has mandated its committee on Petroleum Resources Downstream to organise an investigative hearing to ascertain the true state of the Port Harcourt refinery which the Federal Government has approved the sum of $1.5billion for the rehabilitation.

The House also mandated the committee to carry out a comprehensive audit of funds previously spent on the Port Harcourt refinery and other refineries across the country.

This decision follows a motion moved as a matter of public importance by Representative Onofiok Luke.

READ ALSO: Senate Confirms Nababa’s Appointment As CG Nigerian Correctional Service

The lawmakers expressed worry that so much had been spent on maintaining and rehabilitating the refineries but the outputs have barely improved.

They also asked the Federal Government to grant licenses and provide incentives for the construction of modular refineries.

The Federal Executive Council last week approved $1.5 billion for the rehabilitation of the Port Harcourt refinery which is said to commence immediately.

The Minister of State for Petroleum Resources, Timipre Sylva, who made the announcement after the FEC meeting said the rehabilitation will be carried out in three phases.

Sylva said the first phase will be completed in 18 months which will take the refinery to a production of 90 percent of its capacity, the second phase will be completed in 24 months, while the final phase will be completed in 44 months.

 

Controversial Renovation Fund

The announcement by the Federal Government that $1.5billion will be used for the rehabilitation of the Port Harcourt refinery was met with various criticism from including the Former Vice President, Atiku Abubakar who described the proposal as a waste of resources, especially coming at a time that the nation’s economy is in dire straits.

READ ALSO: We Won’t Borrow All $1.5bn To Rehabilitate Port Harcourt Refinery, FG Tells Nigerians

Atiku suggests that the best course of action will be to privatize the refineries for more effective and efficient management.

Chairman of the Nigerian Governors’ Forum and Ekiti State Governor, Kayode Fayemi in his reaction said more information is needed to justify the rehabilitation.

He faulted the planned project, noting that a private refinery built by Africa’s richest man, Aliko Dangote is underway.

Port Harcourt Refinery Will Work Within 18 Months  – FG

The Federal Government has reiterated its commitment to completing the rehabilitation of the Port Harcourt Refinery, saying it would be functional within 18 months. 

“Port Harcourt Refinery will work, and certainly within the next 18 months,” the Minister of State for Petroleum, Timipre Sylva said in an interview aired on Channels Television’s Sunday Politics. 

The former governor of Bayelsa State equally added that the Nigerian government also plans to rehabilitate other refineries in the country, stressing that the move is not a waste of funds as believed in some quarters.

“There are plans to also fix the Warri Refinery and Kaduna Refinery and then we would get all those staff to work,” he added.

The Nigerian government had on March 17 approved $1.5 billion for the rehabilitation of the Port Harcourt Refinery, an amount which many had described as too much for the project.

File photo: The Minister of State for Petroleum Resources, Timipre Sylva, briefs State House correspondents in Abuja on November 16, 2020.

 

But speaking during the interview, the minster debunked insinuations that the rehabilitation could have taken less than N500m.

“You see, Nigerians like to bandy figures,” Sylva stated. ” I can tell you, that that cannot be true. We are talking with the professionals.”

While many including members of the opposition have raised eyebrows over the funding for the project, with fears that borrowing for the rehabilitation would further mortgage the country’s future, he said borrowing will only form a part of the project.

READ ALSO: $1.5 Billion To Renovate Port Harcourt Refinery Is Suspicious At The Least – Atiku

“Let me tell you how this rehabilitation is going to be funded; it is not going to be all debts, we are not going to borrow all the monies that are going into the rehabilitation (project),” he added.

“Some of the money will come from NNPC’s internally generated revenue – from NPDC, some of it will come from the Federal appropriation, and just a little fraction will come from the African Export-Import Bank (Afreximbank).”

No Hallelujah Yet 

The governor of Rivers State, Nyesom Wike had following the approval of the renovation project, said he is not excited over the development but admitted that if completed, it would boost economic activities in the oil-rich state.

A file photo of the Rivers State Governor, Nyesom Wike.

 

“If the refinery is going to work, it will improve a lot of economic activities, there will be employment for the people of the state,” Wike added.

“We will be happy but I am saying that we have had these promises and promises and nothing has happened. So, I don’t want to begin to say hallelujah. Let us wait and see what will happen based on the approval and the statement made by the minister of state, petroleum. We will hold him accountable for it.”

We Won’t Borrow All $1.5bn To Rehabilitate Port Harcourt Refinery, FG Tells Nigerians

 

The Federal Government says the rehabilitation of the Port Harcourt refinery in Rivers State will not significantly add to the nation’s burden.

A total of $1.5 billion has been proposed by the government to fund the project – a decision that has sparked controversy and debates in various parts of the country.

In what seems to be the latest reaction among several others, the Minister of State for Petroleum Resources, Mr Timipre Sylva, doused the concerns that the project would worsen the nation’s debt profile.

He stated that the government does not intend to borrow all the funds to rehabilitate the refinery which he said would be functional in 18 months.

Sylva disclosed that a subsidiary of the Nigerian National Petroleum Corporation (NNPC) – Nigerian Petroleum Development Company Ltd (NPDC) – and others would contribute the money to be used for the project.

“There are questions asked – when are we going to fix our refineries, when are we going to rehabilitate our refineries? Now, we are rehabilitating the refineries but unfortunately, it is generating all these (issues),” the minister said during an interview aired on Channels Television’s Sunday Politics.

Mr Timipre Sylva says the federal appropriation will contribute $800 million to the project.

 

He added, ”Let me tell you how this rehabilitation is going to be funded; it is not going to be all debts, we are not going to borrow all the monies that are going into the rehabilitation (project).

“Some of the money will come from NNPC’s internally generated revenue – from NPDC, some of it will come from the Federal appropriation, and just a little fraction will come from the African Export-Import Bank (Afreximbank).”

 

The Repayment Plan

The minister gave an assurance that there was no need for Nigerians to worry about how the loan to be secured would be repaid.

He explained that going by the way the project was structured, the operations of the refinery would pay back the funds to be used.

Sylva insisted that the rehabilitation of the refinery would not really be a debt that would add to the general debt burden of the country.

According to him, a commercial discussion between the NNPC and Afreximbank on how the money will be paid from the operations of the refinery is ongoing.

FG To Revive Refineries By 2019 – Kachikwu
A file photo of crude oil pipelines at a refining site.

 

Giving a further breakdown of how the money would be sourced, the minister said, “The NNPC is going to spend about $200 million from its internally generating revenue sources, while the Federal appropriation will put in about $800 million and it is already broken down into three parts.

“The 2020 appropriation will give $350 million, 2021 appropriation will give another $350 million, and 2022 appropriation will give another $100 million, making it all $800 million from appropriation, and then the rest of it will now come from Afreximbank.”

Senate Halts Concession Of Port Harcourt Refinery

The Senate has asked the Ministry of Petroleum Resources to halt all transactions relating to the planned concession of the Port Harcourt refinery to Agip and Oando.

The lawmakers who are questioning the rationale behind the planned concession, say the process appears non-transparent and without recourse to due process.

The upper legislative chamber subsequently, set up a seven-man ad-hoc panel to carry out investigations into the selection process.

The committee is expected to submit a report explaining how and why such a deal was sealed and what criteria was used to select Agip/ENI and OANDO Plc to maintain and operate the Port Harcourt Refinery and at what cost and time-frame.

At plenary on Tuesday, Senator Atai Adoko noted that all processes and transactions should be stopped until the committee submits its report.

Nigeria’s Refineries Record High Performance

RefineriesA financial and operations report just released by the Nigerian National Petroleum Corporation (NNPC) shows that Nigeria’s three refineries witnessed a dramatic increase in refining capacity utilization in March 2016 for the first time in eight months.

The refineries are the Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company, and the Warri Refining and Petrochemical Company.

The report, explains that they processed crude at an average capacity utilization of 17.51% in March compared to 1.84% average capacity utilization the previous month.

The NNPC attributes the improvement to success achieved in the repairs of vandalized crude pipelines feeding the refineries.

Capacity utilisation of the refineries is expected to rise further in the coming months following the re-commissioning of the Escravos-Warri-Kaduna pipeline.

The Minister of State for Petroleum, Mr Ibe Kachikwu, on Tuesday again apologized to Nigerians for the prevailing long queues for petrol saying all is being done to bring the situation to normalcy.

Mr Kachikwu alongside five other ministers rendered account of what has been done in terms of government policies since the inauguration of President Muhammadu Buhari’s administration during the second federal government town hall meeting in Kaduna State.

 

FG Regrets Petrol Scarcity Hardships – Kachikwu

Ibe Kachikwu- PetrolThe Minister of State for Petroleum says difficulties faced by Nigerians in the last two months in getting petrol is regrettable.

Dr. Ibe Kachikwu made the statement on Monday at a Federal Government town hall meeting held in Lagos State, southwest Nigeria.

He said that efforts were being made to enable motorists drive into service stations with ease and come out with the product.

“Be patient with us, lose not your calm yet. We are getting there very quickly,” he said.

The Minister also offered assurances that the nation’s refineries would work in full capacity under the President Muhammadu Buhari led administration.

“I am happy to say for the first time in seven years, we commissioned the crude supply pipelines both in Brass, from Brass to Port Harcourt refinery and from Escavos to Warri refinery.

“We are presently pumping crude through the pipeline to Kaduna and Kaduna (refinery) will be back on stream by the end of next week,” he said.

In the face of the short term measures, Dr. Ibe Kachikwu lamented the diversion of petroleum products conveyed in trucks to other countries and called on security agencies to help tackle this challenge.

Kachikwu was at the town hall meeting along with other ministers where they spoke to artisans, traditional rulers, students and a cross section of the public.

The town hall meeting which is an interaction between the government and persons from different sectors of the economy, is expected to hold in six geo-political zones and two other cities, Abuja and Kano.

Other Minsters present were Minister of Foreign Affairs, Geoffrey Onyeama; Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah and Minister for Transportation, Chibuike Amaechi were also in attendance.

The Minster of Power, Works and Housing, Mr Babatunde Fashola and the Minister of Information and Culture, Lai Mohammed also made presentations at the meeting.

No Plans To Sell Refineries, Kachikwu Tells Nigerians

Ibe Kachikwu - RefineriesThe Federal Government has no plans to sell Nigeria’s refineries to private owners, an official has said.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, during an official visit to the Port Harcourt refinery in Alesa Eleme in Rivers State.

“We are not inviting foreign partners to take over the refineries, we do not have the funds.

“Even now that they are working, they are probably working at about 60 per cent or below capacity (and) we need to upgrade these refineries, get them to a level where they are doing at least 90 per cent performance (and) it requires money,” he said.

The Minister revealed that the total investment for the process was in excess of $700 million, lamenting that the government does not have such fund.

Speaking in company of some senior officials of the NNPC on Saturday in Nigeria’s southern region, he hinted reporters that he was on a tour of the nation’s refining facilities.

Mr Kachikwu explained that the call for foreign partners was to get technical support to upgrade Nigeria’s capacity to achieve consumer quota and export in the course of time.

“What we’ve now done is to find a very creative way (for which we should be praised actually) of bringing in investors who will come in and work with our team here who have the skills, to reactivate and upgrade facilities in these refineries and to help us provide technical support,” he said.

The Petroleum Minister also told reporters that the Federal Government had also changed the refining modules such that refineries pay for their crude with the payment credited to the Federation Account.

He commissioned the crude line into the tank of the refining company, disclosing that the target was to get the country’s refineries up and running at full capacity.

While some Nigerians hoped the refineries run at optimum capacity, the Minister believed that with the right strategy, importation of petroleum products would gradually fade away.

Oil Workers Shut Down Refinery, NNPC Facilities In Rivers

NNPCThe Port Harcourt refinery and all NNPC facilities have been shut down in Rivers State following the controversies surrounding the purported unbundling of the oil corporation.

This was confirmed to Channels Television on Wednesday by the Group Secretary of the National Union Of Petroleum & Natural Gas Workers (NUPENG), Uche Amara, in Abuja where the union leaders are currently meeting.

According to him, the unions were not just concerned about the unbundling procedure which lacked due process, but also other labour matters that needed the attention of the Federal government.

‘Down Tool’

The ‘down tool’ is coming after oil workers shut down the operations of the Nigerian National Petroleum Corporation (NNPC) nationwide until further notice.

The decision was reached on Tuesday at a meeting of the Group Executive Councils of NUPENG and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).

Meanwhile, oil workers have shut down Kaduna refinery over the purported unbundling of the NNPC, asking the government to reverse the decision.

Channels Television’s correspondent in Kaduna State said that the workers locked up the refinery gate, preventing management staff and others from entering the refinery.

In an attempt to address the issues that had resulted after media reports linked him to the statement about the purported unbundling, the Minister of Petroleum, Dr. Ibe Kachikwu, said that the NNPC would not be unbundled but reorganised.

Port Harcourt Refinery To Start Production In One Week – Kachikwu

kachikwu on PH RefineryThe Minister of State for Petroleum Resources, Ibe Kachikwu, has said that the Port Harcourt refinery will start production in the next one week.

The Minister made the statement during his Christmas visit to the plant in Alesa Eleme in Rivers State on Friday.

He was there to oversee the repair work done so far and hinted that the refinery would be back to production in the next one week.

The Port Harcourt refinery has a combined production capacity of over five million litres of PMS per day and the Minister said that getting the nation’s refineries to work at full capacity is the way to go.

According to Mr Kachikwu, the up-scaling of the nation’s refineries ensures transparency and subsequent reduction in the importation of petroleum products that would make scarcity remain in the past.

It was announced earlier in November that the Kaduna Refinery and Petrochemical Company had also resumed production of petrol four months after it was closed for repairs.

The Managing Director of the company, Saidu Mohammed, who disclosed this to Channels Television in Kaduna, said that the plant, which was closed in September, came back on stream ahead of the December deadline for Nigeria’s four refineries to return to full production.

 

Rehabilitation Work At Port Harcourt Refinery Reaches 90%

Refinery-KadunaThe rehabilitation work underway at the Port Harcourt refinery has reached 90 per cent, giving indications that the refinery may soon open for production.

The update on the ongoing work was given by the Managing Director of the Port Harcourt Refining Company, Bafred Enjugu.

Enjugu said the refinery in Alesa-Eleme, Rivers State, in south-south Nigeria constituted 47 per cent of the nation’s total Production capacity.

Channels Television’s correspondent, Emmanuel Ereyi, visited the refinery to get a first-hand assessment of the level of rehabilitation on the long abandoned oil production company.

Nigeria, a leading crude oil producing country in Africa, relies hugely on imported refined petroleum products for its citizens, since the refineries in the country stopped operations years ago.

The new administration of President Muhammadu Buhari had promised to rehabilitate the refineries and make them operational, as the nation could not continue to rely on imported products.

FG To Rehabilitate Kaduna, Port Harcourt, Warri Refineries

As part of measures to reposition the nation’s refineries for optimal performance, the federal government has concluded plans for total rehabilitation of the Port Harcourt, Warri and Kaduna Refineries.

The Public Affairs Manager of the Kaduna Refining and Petrochemical Company (KRPC), Mr. Ibrahim Idris, disclosed to Channels Television in Kaduna, adding that the complete overhaul will be handled by the original companies that built the refineries.

He said the rehabilitation of the Kaduna Refinery will be handled by Chiyoda Corporation, a Japanese company.

The Port Harcourt refinery will be the first to undergo rehabilitation which is expected to commence by June this year. The overhaul according to the refinery official will be done in phases.

Meanwhile, Mr. Idris has assured passengers travelling for the Easter holiday of adequate supply of petrol.

He, therefore, advised the public not to engage in any panic buying of fuel as the refinery has enough PMS to serve states in the North during and after the celebration.

NNPC appoints new MDs for Port Harcourt, Warri refineries

The management of the Nigeria National Petroleum Corporation (NNPC) on Monday approved the appointment of Ian Udoh as the new Managing Director for the Port Harcourt Refining Company (PHRC) and Paul Obelley as the MD of the Warri Refining and Petrochemical Company (WRPC).

The NNPC made this announcement in a statement by its acting Group General Manager, Public Affairs Division, Fidel Pepple.

Mr Pepple said the NNPC also promoted some staff while others were re-deployed.

Those promoted according to the NNPC spokesman include Farouk Ahmed, formerly Executive Director, Commercial in the Pipelines And Products Marketing Company (PPMC) now the Managing Director of the Nigeria-Daewoo Shipping (NIDAS); Samuel Babatunde, formerly Executive Director Operations of the Warri Refinery, now Project Director Olokola Liquefied Natural Gas Project.

Also promoted are Abdullahi Dandume, formerly Executive Director Operations, Nigerian Engineering and Technical Company (NETCO), now Managing Director NETCO and Aliyu Sambo, who was General Manager, M&P, now Group General Manager, Accounts.

Aholu Beks was also promoted as Group General Manager Information Technology Division from his previous position as head of Information Services Department.

Edwin Bako, Medical; Sylvester Idemudia, Greenfield Refineries and Okhes Jonathan, Power, were also promoted as Group General Managers.
Others are Benjamin Obaigbena, Research and Development and Dan Efebo, Human Resources.

Those re-deployed include Gabidon Meheux, former Senior Technical Assistant to the Minister of Petroleum Resources, now Managing Director, NNPC Services and Chris Osarrunwese, former Group General Manager, Human Resources, now Group General Manager, Downstream Business Development.

Bayo Ibirogba, former Group General Manager, Greenfield Refineries, now takes charge of engineering in the same capacity.

The NNPC spokesman said all the appointments took immediate effect.