Business

Reps query NNPC’s $49m refineries integrity test contract

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In 2019, Tecnimont company was awarded contract by the NNPC to carry out a complete integrity check and equipment inspections of the Port Harcourt refinery complex.

The House of Representatives has queried the $49 million contract for integrity test on Nigerian refineries awarded to Tecnimont company by the Nigerian National Petroleum Corporation (NNPC) in 2019.

Ganiyu Johnson, the chairman of the House ad hoc committee investigating the state of the refineries, issued the query during a meeting with the company and NNPC officials on Thursday in Abuja.

Mr Johnson said the company had failed to execute the contract properly as the state of the refineries were not verified.

He also blamed the NNPC for failing to undertake regular turn around maintenance on the refineries leading to their current poor state.

He asked the company and the NNPC to submit the contract documents, especially the approval by the Federal Executive Council and payment proofs including the level of work done to the committee for scrutiny

Nigeria has four refineries, owned by the government, but imports basically its refined petroleum products.

The refineries are located in Port Harcourt, Warrington and Kaduna.

In 2019, Tecnimont was awarded contract by the NNPC to carry out a complete integrity check and equipment inspections of the Port Harcourt refinery complex.

The Phase 1 Rehabilitation contract is worth approximately $50 million and entails a six-month assessment at sitete with relevant engineering and planning activities for the complex.

The complex is composed of two refineries totaling an overall capacity of approximately 210,000 bpd (barrel per day).

Politics

Why Nigerian govt is rehabilitating refineries – Sylva

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The Minister of State for Petroleum Resources, Timipre Sylva, on Thursday, explained why the Federal Government is working hard to rehabilitate the country’s refineries.

Sylva, who featured in a Channels Television programme, Politics Today, said the federal government is not in the best position to manage the refineries.

He, however, assured Nigerians that President Muhammadu Buhari’s administration would hand over the refineries to professional managers.

The minister’s statement came just 24 hours after the federal government approved contracts worth $1.4 billion for the rehabilitation of the Warri and Kaduna refineries.

He said: “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 refineries at all.”

Sylva dismissed claims that the government planned to sell the refineries in their present state.

He added: “We believe that we should get the refineries 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 person to say we are selling dead refineries to people.

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

Politics

Reps to conduct investigative hearing, audit of funds spent on rehabilitation of Nigeria’s refineries

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The House of Representatives on Wednesday resolved to undertake an investigative hearing as well as comprehensive audit of funds spent on rehabilitation, repairs and maintenance of Nigeria’s refineries.

This followed the adoption of a motion of urgent public importance moved by Onfoik Luke at the plenary.

Luke, who led the debate on the motion, said there was the need to ensure transparency and accountability in the rehabilitation of the refineries.

He said the motion followed the recent approval of $1.5 billion (N575 billion) for the rehabilitation of the 32-year-old Port Harcourt refinery.

According to the lawmaker, the rehabilitation will be completed in 44 months with a three components funding from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.

Luke expressed concern that NNPC had allegedly spent about $25 billion in turnaround maintenance of the refineries in the past 25 years.

He said: “Previous rehabilitation notwithstanding, the NNPC audit report last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details.

Despite not processing any crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses.”

The House therefore mandated its Committee on Petroleum Resources Downstream to carry out an investigative hearing and conduct comprehensive audit of the nation’s refineries.

The House urged the committee to report back for further legislative action within six weeks.

Business

Nigerian govt spent N123.45bn on refineries in 12 months –NNPC

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The Federal Government spent a whooping N123.45 billion on Turn Around Maintenance (TAM) on the country’s four refineries in 12 months.

The Nigerian National Petroleum Corporation (NNPC), which disclosed this in its Monthly Financial and Operations report obtained by Ripples Nigeria on Sunday, revealed that the TAM was carried out on the refineries between October 2019 and October 2020.

The refineries are the Warri Refining and Petrochemical Company (WRPC), Port Harcourt Refining Company (PHRC), and Kaduna Refining and Petrochemical Company (KRPC).

The refineries have a combined production capacity of 445,000 barrels per day (bpd).

The PHRC has a production capacity of 210,000 bpd, KRPC 10,000 bpd, and WRPC has 125,000 bpd.

The NNPC report showed that the WRPC, KRPC, and the PHRC recorded no operating surplus in October.

In the straight 13 months, KRPC recorded the biggest loss of N45.53 billion followed by PHRC with N40.87 billion while WRPC had N37.04 billion.

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