Nigerian oil refineries moribund despite $25bn spent in 25 years

* Senate probes NNPC over $396m expended on TAMaintenance

Web Editor | ConsumerConnect

Nigeria has spent about $25billion in turnaround maintenance of refineries in the past 25 years, and the oil production facilities are still moribund, BusinessDay reports.

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

Refineries are production facilities composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value.

The NNPC has a total of four refineries. Two are situated in Port-Harcourt (PHRC), Rivers State, and one each located in Kaduna (KRPC), in Kaduna State, and Warri (WRPC), Delta State, respectively.

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 Senate has revealed that the federal government is simply ineptitude, not ready to revive the oil production facilities, after expending huge resources, and that it is set to investigate it.

The Senate Thursday, January 30, during plenary, laid bare the amount of money the Federal Government has “wasted” on the guise of maintaining the refineries that are obviously not working.

Describing as very poor, the state of refineries in the country, the Senate is peeved that the Federal Government is playing to the gallery by not practically making the refineries workable.

Also, the Senators are concerned that the inactivity of the refineries has prevented creation of job opportunities to the teeming unemployed youths.

Consequently, the Senate has resolved that it will probe the deplorable state of the refineries, vis-à-vis the huge resources government has invested in revamping the oil facilities.

To carry out the investigation, the Senate has mandated three of its committees:  Petroleum – Upstream/Down Stream, and Gas on oversight of the refineries and the relevant government agencies involved.

They are to report back to it for further legislative action, as the Senate President Ahmad Lawan announced the committees.

According to the Senators, going by the high resources government has spent in the name of refurbishing refineries, it is unreasonable that the country still imports oil from some foreign countries.

The position of the Senate was sequel to a motion relied on Orders 42 and 52 of the Senate Rules, sponsored by Senator Yusuf A. Yusuf (Taraba Central).

Leading the debate, Yusuf said, “the oil companies are in total state of collapse even as billions of Dollars have been spent on them.”

He said also that “there is negligence on the part of the NNPC.”

“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 $396million spent between 2013 and 2015 without a meaningful result.”

“The refineries have remained in 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 fifteen percent and twenty-five percent per annum.”

“Despite the huge spending on Turn-Around Maintenance of refineries, NNPC recently announced a cumulative loss of N123.25billion in 10 months (January to October, 2019), putting the total revenue of facilities at N68.82billion.

“Whereas the total expenses incurred was N192.1billion within the same period,” Yusuf stated.

Consequently, the NNPC is urged to totally overhaul the refineries to do away with their non-optimal performance.

Senator Ibikunle Amosun (Ogun Central) said one of the problems the country is facing is lack of maintenance culture.

“Oil should be a blessing to us; but in Nigeria, it makes a lot of establishments lazy. We should be concern about it.

“The refineries are bad and people are now taking the crude outside the country and bringing back refined products to the country on exorbitant prices,” Amosun said.

“The downstream committee should critically look at the problem,” the Senator and former Governor of Ogun State said.

He added that “$25billion Dollars went down the drain in turnaround maintenance of the refineries in the last 25 years.”

He maintained that “they must make sure all the strategic assets in the country, including the refineries, work for good revenue generation.”

Meanwhile, Senate President Ahmad Lawan has noted that if the Petroleum Industry Bill (PIB) is finally passed, it would address the challenges faced by the oil sector.

However, Lawan has assured that work on the bill would commence in February 2020.

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