17 YEARS OF ARRESTED DEVELOPMENT IN OPERATION OF KADUNA AND WARRI REFINERIES ABOUT TO COME TO AN END

NNPC just announced a Public-Private arrangement for the maintenance and operation of two of its refineries; the Kaduna and Warri refineries.

According to the post, the private sector will be responsible “for the Provision of Operations and Maintenance (O&M) Services for NNPC Limited Refineries (Combined Tender): Warri Refining and Petrochemical Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC).”

The NNPC stated that it is “seeking to engage reputable and credible Operations and Maintenance (O&M) companies to operate and maintain two of its refineries, Warri Refining and Petrochemical Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC), to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligation.”

The NNPC further stated that “The O&M tender for WRPC and KRPC will be treated as a single tender through a three (3) stage tender process (EOI, Technical and Commercial) leveraging on all the possible opportunity cost associated with procurement of consumables, personnel/ manpower management, utilization of Computerized Maintenance Management Software (CMMS), Warehousing Management System (WMS) etc.”

Interestingly and strategically, in 2007, the administration of President Olusegun Obasanjo decided to privatize 51% of the Kaduna and Port-Harcourt refineries. President Olusegun Obasanjo ‘sold’ 51% stake in these two refineries to Blue Star Limited (a Special Purpose Vehicle). This privatization decision which the president made in the twilight of his administration was to help Nigeria to be positioned to be an oil producing, oil refining and oil exporting hub.

Unfortunately the decision to privatize the said refineries was overturned by a policy summersault by President Musa Yar’adua. One of the most interesting things to note is that President Obasanjo participated in bringing late President Musa Yar’adua to government as they belonged to the same political party. However, due to politics, agitations and other underlying factors this noble privatization policy was upturned to the detriments of the Nigerian citizenry and Nigeria. It was alleged then that President Obasanjo sold the two refineries to his ‘cronies’. Worthy of note is the fact that Blue Star Limited had Dangote, Zenon, Transcorp and Rivers State Government as its promoters and shareholders.

17 years after the overturning of the privatization policy Nigeria has remained a mass importer of PMS and allied crude oil products. Nigeria began exporting crude oil and importing PMS and other by products of crude oil with massive implications on the health of the economy of our nation.

It looks as if after 17 years of arrested development, the ‘light’ is about to come at the end of the tunnel. It looks as if Nigeria will stop exporting assets and importing poverty. It looks as if the oil and gas sector is being appropriately positioned for the next big thing in the oil and gas industry. The reality is dawning on all that government has no business in running business.

Whoever brought up this idea in the NNPC or the current administration should be ‘aggressively encouraged’ because Nigeria needs to end the self-imposed poverty by addressing all issues that relate to growth and economic well being in a pragmatic way.

BY ADEBISI ADEKUNLE SOGUNLE, ESQ. AUTHOR OF BEST SELLING BOOK; PRACTICAL GUIDE TO PUBLIC-PRIVATE PARTNERSHIP ARRANGEMENTS IN NIGERIA