By Ayo Yusuf
Four days after Nigeria’s Senate set up an ad-hoc committee to investigate all contracts awarded for rehabilitation of all state-owned refineries from 2010 to 2023, the Minister of State for Petroleum, Senator Heineken Lokpobiri and the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, have visited the Kaduna refinery to inspect the progress of the ongoing quick-fix project at the place.
The Minister and Mr. Kyari are also expected to attend the 14th Refineries Rehabilitation Steering Committee meeting in Kaduna.
The 110,000bpd capacity Kaduna refinery is one of Nigeria’s four dysfunctional refineries that have produced no petrol for many years, leaving the country to rely heavily on imported petroleum products.
The last turnaround maintenance on the refinery, according to official sources, was carried out about fifteen years ago.
However, in his efforts to ensure that the nation spends less foreign exchange on fuel import, President Bola Tinubu has directed the ministry of Petroleum and NNPCL to fix the nation’s moribund refineries in order to start refining of crude oil locally.
In February 2023, the NNPCL signed an agreement with a Korean company, Daewoo Engineering and Construction Nigeria Limited for the rehabilitation of Kaduna refinery though little seems to have been heard since then.
Last Tuesday the Senate tasked its ad- hoc committee to investigate all contracts awarded for rehabilitation of all state owned refineries from 2010 to 2023.
This followed the adoption of a motion on “Urgent need to investigate various turnaround maintenance projects of Nigerian refineries, to uncover waste and forestall further waste of scarce public resources,” by Sen. Karimi Sunday ( APC- Kogi) at plenary.
Presenting the motion, Senator Sunday said state-owned refineries in Nigeria had been a serious drain pipe on public finance, depriving citizens of any joy of being in an oil producing nation.
He said from 2010 to date Nigeria was estimated to have spent N11.35 trillion on renovation of refineries, yet they have remained unproductive.
He also said the federal government had spent over N6 trillion in the same period on fuel subsidy due to Nigeria’s low refining capacity and almost twice that on rehabilitating and turn around maintenance projects on its refineries in Port Harcourt, Kaduna and Warri.
According to the senator, despite the moribund condition of the four refineries, the operating costs of the refineries between 2010 and 2020 was N4.8 trillion.
“The refineries are estimated to make a cumulative loss of N1.64 trillion within four years,” he said.
Senator Sunday recalled that the federal government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven years from 2013 to 2019.
He said that phase I of the project was expected to be completed in 28 months after the contract, while phase II was to be completed in 24 months and phase III in 44 months of execution yet as at October 24
“the Port Harcourt refinery has remained a money pit.”
He said by projections and representations from NNPCL, the renovation work ought to be completed and operations of the refinery commenced by June 2023.
Similarly, in a bid to revitalise the Warri Refinery, the federal government had injected huge public funds between 2014 and 2019 and around the 24 June 2022 the Federal Executive Council Awarded Maintenance Services for Quick Fix Repairs of Warri Refinery to Daewoo Engineering and Construction Limited at $497, 328, 500.00.
“Yet at the moment the Warri Refinery is inactive, this is different from the 2017 contract award to Saipem Contracting Nigeria Limited for Tech Plant Survey of the Warri and Kaduna Refineries at 2, 025, 000.32 Euros,” he said.
He also said it was disturbing that the Kaduna Refinery and Petro-Chemical Company (KRPC) had over the past 10 years gulped N2. 266 billion in the name of rehabilitation, yet it remained unproductive.
“The Nigerian National Petroleum Company Limited (NNPCL) approved a renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna refinery in February 2023 intended to restore the refinery to production of 110,000 barrels of petrol per day, at least 60 percent capacity by early 2024,” he said.
He expressed worry that if a thorough investigation of the past and current rehabilitation project was not undertaken by the Senate, the circle of awarding unproductive turn around maintenance contracts may not abate and citizens will continue to groan over high cost of petroleum products due to the moribund situation of the state owned refineries.
Contributing, Sen. Isa Jibril (APC-Kogi), who seconded the motion said the motion brought to the fore, the worrisome situation in the nation’s oil and gas sector.
He said it was worrission that N4.8 trillion was spent on operating cost by these same refineries which were not functional.
Sen. Adams Oshiomhole (APC- Edo) said, “We need to unravel why refineries that were working before suddenly became moribund.
“The amount so far spent on the refineries can build brand new ones, Senators must take the issues with all seriousness it deserves,” he said.
The Senate also urged the committee to ascertain progress on ongoing works in all refineries to forestall waste and corruption.
It also urged the committee to interrogate the Ministry of Petroleum Resources, the NUPRC, NNPCL, BPE, on the best approach to commercializing or ensuring profitability of the state owned refineries.
It urged the committee to invite the NNPCL, NUPRC and LNG to explain the nation’s preparation for green energy sources in line with the Paris Agreement on climate change.
Deputy President of Senate, Barau Jubrin, who presided over plenary said those found to have taken resources meant for functioning of refineries should be brought to book.
He thereafter named Sen. Isah Jibrin (APC -Kogi as Chairman of the ad-hoc committee.
Senator Jubril will investigate the matter alongside the Chairmen of committees on Petroleum Resources Downstream, Upstream, Gas, Finance, Appropriation and Public Accounts.
Other members of the committee included Sen. Abdullahi Yahaya (PDP- Kebbi) Sen. Adamu Alero (PDP-Kebbi), Sen. Ifeanyi Ubah(APC-Anambra) and Sen. Sunday Karimi Sunday (APC- Kogi).
The committee was to present its report in four weeks.
