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.
A 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.
The 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.
The 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.
The 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.
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.
The 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.
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.
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.
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.
The Federal Government plans to spend N250 billion on the Turn-Around Maintenance of the Port Harcourt, Warri and Kaduna refineries.
This was disclosed by the Minister of Petroleum Resources Diezani Alison-Madueke on Monday while being grilled by the Senate Committee on Petroleum Resources (Downstream) over the failure of the government to fix the refineries.
The minister said the beginning of the fourth quarter of 2014, the Turn-Around Maintenance project would have been completed, and the three refineries would be producing 370, 000 barrels per day, which is about 90 percent of the 445,000 barrels needed daily.
The project would start with the Port Harcourt refinery and Mrs Alison-Madueke said the government will spend $146 million out of which $32million (75 percent) had already been paid for the materials needed.
On why petroleum is selling at varying prices across the nation, the minister merely said: “Since the price was changes in January, it has become difficult for the market forces to stabilise at the official price. There is a major issue of supply partly due to subsidy payments. We are battling hard to ensure sufficient supply.”
Asked if the Department of Petroleum Resources (DPR) was helpless at checking the disparity in prices, she replied: “If you are covering a country as large, there will be issue of pricing”.
“The DPR is, however, moving aggressively in the last months to check the anomaly. Of recent, 75 filling stations have been sealed up across the country over disparity in pricing”, Alison-Madueke told the committee.
She informed the committee that the vandalisation of NNPC pipelines in Arepo, Ogun State was a major reason responsible for the recent fuel scarcity in some parts of the country and especially in the South West.
She noted that in the process of repairing the damaged pipelines, three NNPC officials were kidnapped, confirming that the three officials had been killed.
But the committee said petroleum was selling at varying prices because that the minister was allocating the product to the independent marketers with preferential treatment.
The chairman of the committee, Magnus Abe, said: “How can filling stations sell at N97 per litre when the PPMC, as we have discovered, collected money from marketers without supplying them the product on time. Honourable minister, have you ever gone to the depots to see what marketers go through. We were told that you are giving allocation to only those who have godfathers. Unless this anomaly is removed from the source, we can’t force filling stations to sell at official prices.”
The committee also asked the minister to “digitalize” the process of allocating the products to enhance transparency, saying the “current analogue process is creating hidden costs”.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on Wednesday faulted the sack of the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon along with his management team saying that this move will delay the growth of the oil and gas industry.
In a press statement signed by PENGASSAN’s President, Babatunde Ogun, the Union said that incessant changes in the management leadership of the NNPC will affect the on-going reforms policy in the industry.
According to the statement, one of the policy thrusts in the on-going NNPC transformation that is likely to suffer setback is the ongoing Turn Around Maintenance (TAM) and repair of the four refineries intended to put them back on stream to operate at their installed capacity.
Mr Ogun said that in the past few months, “the NNPC management had been working assiduously on how to bring back the refineries and there has been results to this effect, as the Kaduna Refineries and Port Harcourt Refineries have started working progressively towards their installed capacities, while there are plans to put back the Warri Refinery.”
The union leader expressed fear that the new management may abandon the ongoing TAM and repairs of the refineries, and thereby allow the government to sell those refineries as scraps.
The statement also said that “other vital areas where the outgoing team would have been of tremendous value is in the actualization of well articulated visions of a globally competitive national oil company in which their wealth of experience is to be tapped in kick-starting the impending Petroleum Industry law to successful take off.”
While congratulating the new management team led by the new Group Managing Director, Andrew Yakubu, the PENGASSAN president urged the team to follow the laid down reform policies and plans of the outgoing team; adding that the new team will be held accountable for any policy that truncate the growth of the oil and gas industry.
Mr Ogun said that the incessant change in the management leadership of the NNPC will affect the investment drive in the oil and gas sector, saying that “no investor will want to put money in a sector that the government can wake up in one day and just decide to change the drivers of the reforms and policies that can grow such sector.”
He said that one of the requests of the union in various engagements it had with the government is that “the appointment and disengagement of the Group Managing Director (GMD) should be standardized and tailored over tenureship like other government agencies and parastatals.
“Without prejudice, we are against the process of appointment and removal of NNPC Group Managing Director because it has always drawn the industry backward. It does not engender continuity of development policies, as each of the appointed GMDs comes with their governance style and discontinue previous administration’s growth policies.
“In our various engagements with the government, we demanded that the appointment of the GMD should be based on tenure just as we have it in the Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC) and Bureau for Public Enterprises (BPE), among others, should be put in the PIB.”
The Union leader said that in the last 10 years, the national oil corporation had six GMDs from Jackson Gaius-Obaseki to Austen Oniwon, while the CBN and the NCC have had two each with the same period, adding that this brings serious challenges of uncertainty and instability in such major appointments, in a volatile and strategic industry like the oil and gas.
While decisions have been taken and new drivers of the Corporation appointed, he said the government must address our concerns which we believe will go a long way in helping the growth of the oil and gas industry.
President Goodluck Jonathan on Tuesday, held a meeting with refinery operators and technical managers of the three refineries in Kaduna, Port Harcourt and Warri in an effort towards bringing a full turn around to the refineries.
The meeting which took place at the Presidential villa is following a two day retreat convened by the Minister of Petroleum resources and is designed to find solution towards tackling the challenges that led to the inability of the refineries to operate at full capacity
Briefing state house correspondents after the meeting the Minister of Petroleum Resources, Mrs. Deziani Alison Madueke said that the challenges in the Nigerian refineries are still prevalent but that the retreat was designed to encapsulate the challenges that they saw and put the solutions across the board.
According to the Minister, plans for the new Green Field refineries billed for Lagos, Bayelsa and Kogi states, which are envisaged to add 750,000 barrels per day of extra refining capacity to Nigeria’s current 445,000 barrel per day capacity, is still on course. And she emphasized that the government will only be playing a very minimal-participatory role in the building of the refineries.
She says besides this move, the sector is being thrown open to capable investors and the federal government participation in the running of the new refineries will be minimal to allow better efficiency
The Minister condemned the incessant vandalisation of oil pipelines, which claims is still prevalent in the country, as well as the outdated equipment and lack of training. She noted that a strategic frame work will soon be fashioned out to bring a turn around to the refineries.
In a separate event, the Kalu Idika Kalu led task force on refineries was inaugurated with a 60 working days timeline to complete its mandate of unraveling the issues bedeviling local refining.