FG Not The Best Manager Of Refineries – Petroleum Minister

By Akinola Ajibola

 

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

 

The Federal Government has admitted that it is not in the best position to manage the nation’s refineries.

Minister of State for Petroleum Resources, Timipre Sylva, stated this during his appearance on Thursday’s edition of Politics Today.

“I will agree with you that government is not the best manager of refineries and that is why this time, we are actually going to have professional managers to manage the refineries; we are not going to manage the refinery at all,” he said on the Channels Television programme.

Despite the submission, the minister believes it will not be out of place if the government gets the refineries working before taking appropriate decisions.

He explained that the government does not subscribe to the idea of selling off the refineries in their present condition as such action would be widely criticised by citizens.

 

‘The Fairest Thing’

 

Sylva stated, “We believe that we should get the refinery back to life before we decide on the option of whether we are going to privatise or sell all the refineries.

“If we try to sell the refineries which you call dead refineries, you will be the one first persons to say we are selling dead refineries to people.”

He said the Muhammadu Buhari administration cannot be blamed for the present state of the facilities as it inherited damaged refineries.

Despite this, he said the government has decided to prove to Nigerians that the refineries can be fixed and put back into working condition.

After the refineries have been fixed, the minister believes Nigerians can then decide what to do about them.

“We want to sell live refineries; refineries that are working and I think that is the fairest thing for the government to do and that is why we have decided to get all our refineries working.

“We want to prove to you that we can get these refineries working,” he said.

Senate Investigates NNPC Over $396m Maintenance Cost For Refineries

FG To Revive Refineries By 2019 – Kachikwu
File photo

 

 

The Senate on Thursday resolved to probe the Nigerian National Petroleum Corporation (NNPC) over the sum of $396 million expended on Turn-Around Maintenance of refineries in the country between 2013 and 2015.

Following the resolution, the Upper Chamber mandated its Committee on Petroleum Downstream, Upstream, and Gas to carry out a holistic investigation on the Turn-Around Maintenance expenditures and the current state of the refineries, as well as convene a stakeholders conference with the aim of finding ways to revamp them.

The decision to investigate spending on maintenance of refineries by NNPC was reached after consideration of a motion brought to the floor by Senator Yusuf Yusuf from Taraba State.

Senator Yusuf told his colleagues that the NNPC has four refineries – two in Port Harcourt (Rivers State) and one each in Kaduna and Warri, (Delta State).

According to him, the refineries were established to adequately supply and serve needs for Liquefied Petroleum Gas (LPG), Premium Motor Spirit (PMS), Dual Purpose Kerosene (DPK), Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO), High Pour Fuel Oil (HPFO), and Aviation Turbine Kerosene (ATK) for both local consumption and exports.

“The country through NNPC has in the past 25 years spent billions of US dollars in Turn-Around Maintenance of the refineries, the latest being over $396 million spent between 2013 and 2015 without meaningful result,” the lawmaker said.

He added, “The refineries have remained in the moribund state in the last 15-20 years and are almost reaching total collapse due to lack of proposer maintenance of the facilities with a poor average capacity utilisation hovering between 15 per cent and 25 per cent per annum.

“Despite the huge spending on turn-around maintenance of refineries, NNPC recently announced a cumulative loss of N123.25 billion in 10 months (January – October 2019), putting the total revenue of facilities at N68.82 billion, while total expenses incurred was N192.1 billion within the same period.”

Senator Yusuf warned that such huge wastage and slippages amidst the nation’s tight economy, if not addressed, may lead the country back to recession.

NNPC To Begin Full Rehab of All Refineries In January, Says Kyari

 

The nation’s refineries, located in Port Harcourt, Warri and Kaduna, will roar to live to refine crude oil at optimum capacity come 2022, the Nigerian National Petroleum Corporation (NNPC), has assured.

NNPC Group Managing Director, Mallam Mele Kyari, who disclosed this Saturday during a facilities tour of the Port-Harcourt Refining and Petrochemical Company (PHRC), stated that full rehabilitation of the plants would commence January, 2020.

A release by the corporation’s Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, said the NNPC helmsman’s visit to the refinery was part of his strong determination and commitment to ensure that the nation’s refineries deliver real time value and address the petroleum needs of Nigerians.

Mallam Kyari said making the refineries to operate at optimal capacities was a mandate that NNPC as a corporation would leave no stone unturned to actualize, saying a timely delivery of the asset was a priority.

READ ALSO: Nigeria To Earn Fresh $6.35bn In Taxes, Royalties – NNPC

“We will stick to time, we will deliver this project by 2022. We will commence actual rehabilitation work in January. We will do everything possible between October and December to close out all necessary conditions for us to deliver on that project. I believe that with the support that we have from the shareholders – government of this country, the entire staff of this company and the contractors, I believe it is doable and we will deliver the project”, the GMD said.

He tasked the contractors on the need to consider their reputation as most critical element in business processes and engagements.

“It’s no longer about business now, but a reputational issue. For the original builders of the refinery, Tecmmont, Eni/NAOC and NNPC, let us be conscious of the fact that our reputation is at stake as far as this project is concerned. The NNPC leadership has promised this country that our refineries will work, therefore, we must work not to disappoint over 200million Nigerian stakeholders”.

The NNPC boss challenged the PHRC management to ensure that the nation’s indigenous engineers and other professionals working in the refinery are fully engaged to participate actively during the rehabilitation exercise and own the process.

According to the GMD, the involvement of the indigenous workers will build capacity, save cost and introduce an era of steady and uninterrupted production curve that will grow the oil and Gas Industry.

In his presentation on the progress and milestones on Phase 1 of the projects, the Tecmmont Project Manager, Mr. La Mattina Carmelo, informed that the Inspection aspect of the project has progressed to 91% and Final Report and EPC Proposal stood at 75%, adding that his company would deliver the first phase of the rehabilitation within three weeks from now.

He assured that there were no challenges as the project was progressing efficiently, pledging to offer its best services to ensure a timely delivery.

In the same vein, the project consulting company, Eni/NAOC, represented by the its project manager, Daniele Tamburini, confirmed that the work done so far by the NNPC and Tecmmont complied with global standard.

Tamburini said his company was ready to receive the full report of the scoping for final assessment and support the corporation to deliver the project in record time, saying that the initiative was a good business for Nigeria.

Earlier in his address, the Managing Director of the PHRC, Mr. Abba Bukar, expressed appreciation to the GMD for his deep commitment in ensuring that the refinery works for the benefit of Nigerians.

UAE Launches $45bn Investment To Boost Refineries

 

Abu Dhabi National Oil Co. on Sunday announced a $45-billion (38-billion-euro) investment to modify an existing facility into one of the world’s largest integrated refining and petrochemicals plants.

The project aims to boost ADNOC’s refining capacity by 65 percent to 1.5 million barrels per day by 2025, the state-owned firm’s CEO Sultan al-Jaber told a downstream investment forum.

The work will upgrade the refining and petrochemicals plant at Ruwais in partnership with international energy firms, he said.

ADNOC also plans to treble petrochemicals output at Ruwais from the current 4.5 million tonnes per year to 14.5 million tonnes a year, he said.

Abu Dhabi, one of seven states in the United Arab Emirates, holds more than 90 percent of the federation’s 98 billion barrels of crude oil reserves.

In November, Abu Dhabi announced plans to invest $109 billion (81 billion euros) in the energy sector over the next five years.

The UAE, OPEC’s fourth largest producer, aims to boost crude oil production capacity from 3.2 million barrels per day at present to 3.5 million bpd at the end of the year.

Over the past few months, ADNOC has awarded concession rights at offshore sites to several international oil companies to boost its long-term production capacity.

It also renewed and extended concessions at onshore oilfields for major companies including Exxonmobil and Total.

Last month, ADNOC invited bids for exploration contracts for six major blocks with untapped oil and gas reserves.

ADNOC said the blocks are estimated to hold billions of barrels of oil and trillions of cubic feet of natural gas.

AFP

NNPC Vows To Revive Nigeria’s Refineries

NNPC, GMD,
NNPC, GMD, Dr Maikanti Baru

 

The Nigerian National Petroleum Corporation (NNPC) has vowed to get the nation’s four refineries back to their optimal, working capacities.

Group Managing Director of the corporation, Dr. Maikanti Baru made the promise at the weekend, shortly after receiving the Man of the Year Award from a Lagos-based daily.

According to a statement signed on Monday by the NNPC’s General Manager Public Affairs Division, Ndu Ughamadu, Baru said the corporation had been holding far-reaching discussions with some consortia to get the best funding options towards the refineries’ overhaul.

He added that the corporation, under his watch, had recorded remarkable progress in resuscitating some of the nation’s critical downstream infrastructure, a development which had ensured a seamless supply of products Nationwide, until the recent past hiccups which are now under control.

“Since coming on board, we have made the revamp of our abandoned assets and critical downstream infrastructure a key component of our corporate vision of 12 Business Focus Areas (BUFA),” he stated.

Dr. Baru said over the last few months, several crude oil, petroleum products and natural gas pipelines were resuscitated while more than half of the nation’s 21 strategic depots were also upgraded.

He, however, decried acts of pipeline vandalism, crude oil theft and sabotage which he noted had resulted in huge loss of revenue, lives and property as well as damage to the environment.

The NNPC boss, therefore, called on the security agencies and other stakeholders nationwide to collaborate with the corporation in its on-going campaign against act of sabotage on the nation’s oil and gas facilities.

While attributing the recent fuel challenges faced in parts of the country to the nefarious acts of hoarders, diverters, profiteers and smugglers, Dr. Baru stressed that the corporation was working with relevant stakeholders to ensure the sufficiency currently witnessed nationwide is sustained.

Fuel Crisis: Rewane Asks FG To Sell Refineries

 

Economist and Chief Executive Officer of Financial Derivatives Company, Mr Bismark Rewane, has asked the Federal Government to sell Nigeria’s refinery and adopt a pricing mechanism that works for private investors.

Mr Rewane made the call on Sunday during an appearance on Channels Television’s special End of the Year Programme, after explaining that repeated efforts to maintain and turn the fortunes of the refineries around have failed.

Over the years, there have been calls for the privatisation of the refineries, but the calls have often been countered by some others.

Mr Rewane, who noted that the calls had continued when the current administration came to power, said, “Three years later, we are looking at it and they are not performing. So, I’m hoping that the President in discussing the issue tomorrow will accept that one of the solutions is to sell those refineries off and stop playing around with these suboptimal solutions. Let us have solutions that work.”

Rewane

Stressing that companies in the telecoms sector are performing well, Mr Rewane said, “If we did the same thing for petroleum refining just like the NLNG, then we’ll begin to see solutions.

“For now, we have to accept that because there is hoarding (one), and because everyone is afraid – people that normally fill their tanks up to 25 percent are filling 100 percent, the demand (for fuel) has more than doubled.

“It will take some time before the confidence is restored and all that. So, it is part of the problem that we have and it is a perennial problem so we have to solve it with a broad solution. The way I see it, sell off those refineries, encourage Dangote refinery to ‘fast forward’ and then more than anything else have a price mechanism that works.

“There is no queue in Cotonou, there is no queue in Lome and they don’t have refineries. So, it is a perception and market problem. We need to have the pricing right, and if you know you are going to subsidise it, then pay the subsidies at the right time so that everybody is happy and they can do things.”

FG To Revive Refineries By 2019 – Kachikwu

FG To Revive Refineries By 2019 – Kachikwu
File photo

 

The Federal Government has revealed plans to resuscitate refineries in the country and return them to a fully functional condition by 2019.

Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said this on Wednesday in Abuja shortly after the Federal Executive Meeting.

READ ALSO: Osinbajo Presides Over FEC Meeting As Buhari Attends One Planet Summit

He said that apart from giving the kiss of life to the plants, the government also targets three refineries for starters to produce at least 450 barrels per day.

Amateur photo: [L-R] Uguru Usani, Ibe Kachikwu, Chibuike Amaechi, and Garba Shehu

The minister also told State House correspondents that the Federal Government has no plans to reduce the price of Premium Motor Spirit (PMS), also known as petrol.

Kachikwu briefed reporters alongside the Minister of Niger Delta Affairs, Uguru Usani; Minister of Transportation, Chibuike Amaechi; and the Senior Special Assistant to the President on Media and Publicity, Garba Shehu.

Vice President Yemi Osinbajo presided over the FEC meeting, which held inside the Council Chamber of the Presidential Villa, in the absence of President Muhammadu Buhari who is attending a summit in France.

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NNPC Inaugurates Eight Committees To Rehabilitate Refineries

NNPC officials during the inauguration of the eight committees. Photo Source: NNPC

The Nigerian National Petroleum Corporation (NNPC) has inaugurated eight committees which are charged with ensuring that the nation’s three refineries operate at their full capacities in 2019. 

NNPC spokesperson, Ndu Ughamadu, said in a statement on Wednesday that the Group Managing Director of the Corporation, Maikanti Baru, urged the committees to deploy “out of the box solutions” to ensure that the refineries return to their good old days of top class performance.

“I am convinced that the teams we have selected here today will give the necessary direction towards returning the refineries back to their optimal levels of performance,” the NNPC GMD was quoted as saying.

“We want to show everyone that we can fully run the refineries. You must all work together to operate them at 100 per cent capacity as this was the only way to ensure profitability.” adding that “we can fix the refineries but without the right people to operate them, they would go back to where they were or even worse.”

Although Baru is optimistic that the refineries can be fixed, he warned that “without the right people to operate them, they would go back to where they were or even worse”.

The Chief Operating Officer Refineries and Petrochemicals, Anibor Kragha, while inaugurating the committees informed them that the 2019 target was the first time in 20 years that both the political will and the economic climate to ensure effective “retrofitting of the refineries” are present.

He further said that over 28 expressions of Interest had been received so far for the financing of the rehabilitation project and that the goal was to get more by the end of the year.

“Payment is therefore hinged on performance, ensuring a win-win situation for Nigeria,” Kragha said.

IPMAN ABA Calls For Govt. Intervention Over Moribund Refineries

Petroleum, GasThe Independent Petroleum Marketers Association of Nigeria (IPMAN), Aba unit, Abia state, has called on government to repair the moribond refineries in the state.

Lamenting over the situation, the Public Relations Officer of the association, Chukwumaeze Njoku, hinted that the epileptic supply of petroleum products from the refinery at Port Harcourt, has subjected them to continue to source for the product elsewhere at a very high cost.

Mr Njoku appealed to relevant authorities to ensure that the refineries are up and running while also suggesting adequate maintenance and strict surveillance of oil pipelines within the state.

“I want to say that fuel availability in Abia state has been epileptic because the depot in Aba where most marketers are expected to pick their product, has been moribund.

“I would like to say that, before then, the marketers have had to endure the epileptic supply from the refinery in Port Harcourt.

“I want you to know that, we stopped lifting products from Osisoma depot on May 2016 and till date, we have not had any supply.

“I believe I am speaking for the marketers who want the refineries to be fixed and adequate care taken to assist the communities where the pipelines passes.

“I want to appeal to the relevant authorities to maintain the pipelines with good surveillance.

“I must admit that the task of ensuring fuel availability in the state rests squarely on our shoulders and what we do is to go as far as Lagos, Calabar to procure these petroleum products at our own expenses and risk.

“I want to say that the government should do something fast to reverse the trend, “Njoku stressed.

Support Local Content Policy To Boost Industrialisation, DPR Urges Nigerians

DPRThe Department of Petroleum Resources (DPR) has urged Nigerians to support the local content policy of the Federal Government by patronising locally made products, which it says will enhance domestic industrialisation especially in the gas sector.

The DPR made the demand on Friday during their periodic facility audit and inspection of activities of gas sector stakeholders in Owerri, the capital of Imo State.

The South-east Head of Gas sector of the DPR, Mr Albert Echibe, pointed out that part of the statutory function of the DPR was the promotion of local content policy in the oil and gas industry as well as the re-certification of the integrity of equipment and facilities used in the Liquefied Petroleum Gas industry.

Saving Foreign Exchange

In Imo State, the DPR is currently inspecting the activities of petroleum marketers, with an audit of facilities and equipment used in the gas sector, with the team visiting some steel fabrication workshop where gas vessels are manufactured and also an ongoing gas plant construction site in Owerri.

The Team leader, Mr Echibe, said that the DPR would not fail to sanction any person or company that did not meet the required standard given by the DPR in the production and usage of major facilities and equipment in the gas sector.

He stressed that in the oil and gas industry, there were issues of increased cost of importation of facilities and equipment which in turn had ripple effect on consumers, but gave the assurance that if chances were given to local content production and patronage, all the issues would be resolved, saving foreign exchange.

The Department of Petroleum Resources in the state has emphasised its committed to their statutory functions and responsibility of ensuring compliance to petroleum laws, regulations and guidelines in the Oil and Gas Industry especially as it involves monitoring of operations at drilling sites, production wells and platforms, flow-stations, refineries, storage depots, pump stations, retail outlets and natural gas and petroleum products.

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.

FG Approves Unbundling Of NNPC Into Seven Units

nnpcThe Federal Government has approved the creation of seven operational units in the Nigerian National Petroleum Corporation (NNPC).

This is according to the Minister of State for Petroleum Resources, Ibe Kachikwu, who said that five of the seven operational units would be strictly business-driven in line with global best practices.

The new units include those for Upstream, Downstream, Gas and Power, Refineries, Ventures, Corporate Planning and Services, and Finance and Accounts.

He said each of the units would be headed by Chief Executive Officers; namely Bello Rabiu for Upstream; Henry Ikem-Onih for Downstream; Anibor Kragha (Refineries); Saudu Mohammed (Gas and Power), while Babatunde Adeniran takes charge of Ventures.

The Group Executive Director in charge of Finance and Services would be Isiaka Abdulrazaq, while the Executive Head, Corporate Services will be Isa Inuwa.

The Minister of State for Petroleum, Dr Ibe Kachikwu, had few days earlier announced that the Nigerian National Petroleum Corporation (NNPC) would be unbundled into 30 competitive revenue generating subsidiaries.

Dr Kachikwu told petroleum industry experts at the Oloibiri Lecture Series and Energy Forum organized by the Society of Petroleum Engineers, that an overhaul of the foremost government oil firm, NNPC was imminent, to ensure the return of profitability and stability in the sector.

He said that the move, which would be a major overhaul of the system, would reposition the corporation to bring in huge profits which has been impossible to achieve in the past 15 years.