Energy
Port Harcourt/Warri/Kaduna Refineries will never work until…
By Ifeanyi Izeze
“Someone told me Tinubu said refineries would work by December. I told the person the refineries would not work.” To me it’s not surprising that former President Olusegun Obasanjo could outrightly dismiss the renewed hope of Port Harcourt, Warri, and, Kaduna refineries functioning optimally ever again as long as it’s in the hand of the government and the main problem rather than being resolved is danced around. He spoke based on facts and not mere politics.
From my knowledge of the Nigeria oil sector especially the refining subsector and the latter introduced ‘fuel-importation sub-subsector’, none of the existing NNPCL’-owned refineries is ever going to work optimally in this country except those involved in the fuel importation and crude-for-product swap arrangement are exposed and publicly punished. Anything other than that, we are just merely dancing around the problem.
For the NNPCL to refuse to make public those who have been bringing in fuel and receiving subsidy payments from the company and from the Petroleum Equalisation Fund(PEF) at least within the last ten years or even beyond, means we are merely dancing around the problem. Whether anybody wants to hear this or not, this is where the witchcraft bedeviling our existing refineries is domiciled.
For decades, the refineries and fuel importation business plus the crude-for-product swap deals have been Nigeria’s biggest lottery, the draw with which the NNPC (L) keeps its cronies- politicians and the government in power.
The story of the refineries will remain the same- beclouded by confusion except this niche in our nation is dealt with thoroughly and frankly. Most of the people who claim they bring in fuel into the country, don’t bring anything. Na me talkam!
The Minister of State Petroleum Downstream (Oil), Heineken Lokpobiri, and the NNPCL boss, Mele Kyari said that the Port Harcourt refinery will come onstream by year-end and Warri by the first quarter of 2024 is clearly a not-too-smart lie to deceive Nigerians. The Kaduna plant is an entirely different thing because its case is even worse than the other two.
Let me even ask: What’s the integrity of the crude feedstock supply trunk lines to both Port Harcourt and Warri refineries? So by December, NNPCL will again tell us that the Port Harcourt plant is ready to run except for the problem of crude oil supply to the site as a result of breaches on the line by oil thieves. Abi?
Has anybody ever bothered to ask why all the trunk lines supplying feedstock to our refineries (Kaduna inclusive) are the worst breaches in the history of pipeline vandalisation in this country? Most of those breaches were not carried out by casual “kporfire” oil thieves. No! Truth be told, they were carried out by those who would not want the refineries to ever think of working at all NNPC(L) inclusive. This is a discussion for another day!
The tragedy of the current Nigerian downstream situation is that every single person who could have been defending our collective national interest in this matter is deeply involved in the ongoing racket either directly or by proxy. The presidency calls the shots, top managers of the NNPCL and its strategic business units, and top National Assembly members are all neck-deep in the racket.
Now, Mele Kyari, the current charge d’Affairs at the nation’s apex oil concern is telling us that “bringing back the refineries to their optimal levels was a national aspiration and that the NNPC Ltd remained focused on delivering that.
“The Port Harcourt refinery would begin operations before the end of 2023, specifically in December. The Warri refinery, which is also being renovated, would begin refining crude oil to churn out petroleum products in February 2024 and then, Kaduna will come on stream towards the end of next year.
“We are hopeful that in 2024, this country will be a net exporter of petroleum products,” Kyari stated.
How come Nigerians even the best learned amongst us are been taken for granted like this?
Come; let us reason together on this matter: There is no amount of rehab that can be done on a Plant that’s over 40 years old to bring it back to function at 90 percent designed capacity, especially the ones that have been dead for over 20 years. You don’t need to be a Professor to know this, elementary process engineering will tell you that.
We have not forgotten that Tecnimont, an Italian process engineering and consulting firm did the first diagnostic review of the Port Harcourt Refinery for the NNPC in 2012 at the invitation of the then Group Managing Director of NNPC, Austen Oniwon.
The Italian firm asked for about $3 million for its integrity check on the Port Harcourt Plant and estimated the cost of repairs at about $290 million. This cost was later escalated to $400 million as the Nigerian factor and fraudulent interests of top NNPC managers and political players came into the bid for the project.
When Diezani Allison-Madueke became the Petroleum Minister under the Jonathan administration, everything changed.
In 2013, $1.6billion was budgeted for Turn Around Maintenance (TAM) for the nation’s existing three refineries- Port Harcourt, Warri, and Kaduna, and Mrs. Diezani Allison-Madueke, told the entire world that over 75 per cent of the spare parts for the maintenance of the Port Harcourt Plant had been procured and received by the NNPC. She also said that the TAM would cost $147 million while modernisation of the refinery could cost $406 million and that the original builder of the refinery had already been paid $32 million for the job.
When Buhari’s government came on stage, Dr. Ibe Kachikwu, who first served as the NNPC GMD and later as Minister of State for Petroleum, suspended Tecnimont’s original bid to fix the Port Harcourt Refinery on the ground that Nigerian engineers in the NNPC system can do whatever Technimont was proposing if the materials are made available to them.
When Maikanti Baru, took over as NNPC GMD, in what obviously looked like playing a script set to undo every positive initiative that his predecessor undertook including asking the Italian Technimont to come back to the Port Harcourt refinery rehab project.
Remember what the immediate past Minister of State for Petroleum Resources, Timipre Sylva said a few months before the end of the Buhari rule: “The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of $1.5 billion and it was approved by the Federal Executive Council (FEC).
“So, we are happy to announce that the rehabilitation of the refinery will commence in three phases of 18, 24, and 44-month intervals. The first phase is to be completed in 18 months (one and half years from now) which will take the refinery to a production of 90 percent of its nameplate capacity.
“The second phase is to be completed in 24 months (two years from now) and the final stage will be completed in 44 months (almost 4 years from then).”
This is 2023 we are still where we were a decade ago in the nation’s refining subsector.
What’s the implication of all this deceit? It’s only clearing the way for a refined petroleum market that belongs to those who make policy (in the NNPCL and the Presidency and cronies) to continue to feed fat from the arbitrary price of fuel to the detriment of about 300 million Nigerians who have been made victims of the local Petroleum market for 23 years.
When will this country mean more to us than individual selfish greed? Mine is to pray o: O’God abeg help Nigeria na!
- Mr. Izeze a celebrated public analyst is a National Daily Columnist. He can be reached via iizeze@yahoo.com; 234-8033043009 (sms only)