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Tag: Port Harcourt Refinery

  • ‘How crude oil refining in PH refinery will reduce pump price’

    ‘How crude oil refining in PH refinery will reduce pump price’

    The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA ) says resupmtion of crude oil refining in the Port Harcourt Refinery Company will reduce pump price.

    The National President of the association,  Mr Benneth Korie told newsmen on Monday in Abuja that the refinery would begin crude oil refining before the end of 2022.

    He quoted the Minister of State for Petroleum Resources, Chief Timipre Sylva as assuring that the PHRC refinery would soon begin crude oil refining.

    The Nigerian National Petroleum Company Limited (NNPC Ltd) commenced the rehabilitation of PHRC refinery in May 2021.

    The Federal Eexecutive Council (FEC) had approved $1.5 billion dollars for the rehabilitation exercise which was being executed by Tecnimont SPA, an Italian company, in three phases of 18, 24 and 44 months.

    The PHRC operates two refineries; the old refinery with a capacity of 60,000 barrels per stream day (bpsd) and new refinery with an installed capacity of 150,000 bpsd.

    This, he said, brings the combined crude processing capacity of the PHRC refineries to 210,000bpsd.

    He said with this development, the price of petroleum products would go down, adding that the refinery had been under maintainace and would come up in production once operation began.

    “But we have assurances from the Minister of Petroleum Resources that the PHRC refinery will start working this December, definitely between now and end of January 2023.

    “After Port Harcourt, other refineries including Warri and Kaduna will come up because work has been seriously going on there.

    “Then you will see that prices of petroleum products will go down on its own because there is a difference between importation of products and loading from our refineries,” he said.

    He said the refinery, when it become operational would blend Automative Gas Oil (AGO), Premium Motor Spirit (PMS), DPK, Jet A1 and other products.

    The NOGASA president decried delays and cost of  distribution of products due to loading from the depot, adding that once the refineries began operation, importation of petroleum would stop and the trucks would loading directly from it.

    “Formerly; trucks used to load from refineries but now paid vessels spend between 10 and 14 days to load product from depots  as against one day, marketers and transporters are suffering and sacrifice a lot in the bid to distribute products,” he said.

  • BREAKING: FG signs contract for $1.5bn rehabilitation of Port Harcourt refinery

    BREAKING: FG signs contract for $1.5bn rehabilitation of Port Harcourt refinery

    The federal government of Nigeria on Tuesday signed the contract for the $1.5 billion rehabilitation of the Port Harcourt refinery, located in Port Harcourt, Rivers State.

    TheNewsGuru.com (TNG) reports the contract was signed between the Nigerian National Petroleum Corporation (NNPC) and Tecnimont S.p.A, a subsidiary of Maire Tecnimont S.p.A.

    The contract entails engineering, procurement and construction (EPC) activities for a full rehabilitation of the Port Harcourt refinery complex, aimed at restoring the complex to a minimum of 90% of its nameplate capacity.

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

    The project will be delivered in phases from 24 and 32 months and the final stage will be completed in 44 months from the award date.

    TNG reports the Managing Director (MD) of Port Harcourt Refining Company (PHRC), Engr. Ahmed Dikko signed the contract for the Port Harcourt refinery on behalf of the FG, while Mr. Davide Pellizola, Maire Tecnimont’s VP, Sub-Saharan Africa signed for his company.

  • $1.5bn Port Harcourt Refinery Rehabilitation: Between Sense, Sentiments and Sensationalism, By Sadou Jattu

    $1.5bn Port Harcourt Refinery Rehabilitation: Between Sense, Sentiments and Sensationalism, By Sadou Jattu

    By Sadou Jattu

    Since last week when the Federal Executive Council (FEC) approved the sum of $1.5bn for the rehabilitation of the Port Harcourt Refinery, all hell has been practically let loose. Well-meaning Nigerians from all walks of life have been sharing their views on the issue and many of them have neither been complimentary nor supportive of the decision. A close analysis of the reactions so far shows that only the organized labour under the auspices of the Nigeria Labour Congress (NLC) and the Trade Union Congress and TUC) and a few others appear supportive of the move. The media has been largely on the side of those who believe the rehabilitation is a waste of time and resources and has valiantly tried to sway the public in that direction.

    A further scrutiny of the various tirades against the refinery rehabilitation project shows several strains of arguments. The first is that government and the Nigerian National Petroleum Corporation (NNPC) cannot be trusted to do a good job of the rehabilitation as they have failed over the years with the various Turn-Around Maintenance which gulped billions of dollars without getting the refineries closer to optimal functional state. The second is that the refineries are too far gone on the path of dilapidation to be effectively rehabilitated, thus any amount spent on their repairs is a waste. A slight variant of this argument is that the world is on the cusp of moving away from fossil fuels which would make any investment in the rehabilitation of refineries a waste. The third argument is that borrowing money at a time of dire economic constraints like this for fix the refineries would only dig the nation deeper into the debt trap. Yet another argument is that the $1.5bn approved for the rehabilitation could actually build a new refinery and that it is a waste to spend it on an old refinery.

    There are two common threads that run through these arguments – sentiments and sensationalism. These are not new elements to any discourse on the refineries. Anyone who has been following developments in the refining sector would readily remember the loud protests that greeted the sale of the Port Harcourt Refinery by President Olusegun Obasanjo towards the end of his administration in 2007. The argument then, anchored on sentiments and propelled by sensationalism, was that our common patrimony was being sold to an individual. Ironically, most of those who were proponents of the return of the Port Harcourt Refinery to government ownership are the ones insisting now that it should be sold and not rehabilitated.

    What could have been responsible for the change in position? It is possible to argue that the inability of NNPC to revamp the refinery since 2008 when the sale was reversed created disenchantment and loss of confidence in their ability to maintain and operate it profitably. But that is only one side of the story that presents a short-sighted view of the whole issue. Prior to the sale of the Port Harcourt Refinery and its eventual reversal, the maintenance of the refinery had been largely badly managed due to government interference. Reversing its sales without a significant change in terms of government interference could not bring about much change in the fortunes of the refinery. This is the foundation of the trust deficit that is driving the sentiments around the recently announced plan to rehabilitate the refinery.

    But the situation today is not exactly the same as it was years ago in terms of government interference, transparency and accountability. Putting the issue of government interference in perspective recently at an interactive session with journalists, the Group Managing Director of NNPC, Mallam Mele Kyari, stated that since he assumed duty, he has never been put under pressure by the President to do anything unethical. This is easily believable considering the way he has championed the transparency and accountability drive at the NNPC. It is only someone who has no skeleton in his cupboard and who is not under pressure to do wrong things that can go about opening up his books for public scrutiny the way the Mallam Kyari-led management is currently doing at the NNPC. It is, therefore, safe to say that the NNPC of today is different from the NNPC of the past under which the refineries got to their current state. It would, therefore, not be right or fair to insist that the rehabilitation wouldmiscarry and the fund approved for it go to waste on account of past experience.

    The other argument that the refineries are too old and decrepit to be fixed is also warp logic. It is just like saying that a baby is too dirty and should be thrown away with the bath water. It is nothing but foolish sentiment to reason that way about a national asset like a refinery, which if properly managed could help drive the nation out of the current catch-22 situation wherethe economy is adversely affected whichever way the price of crude oil turns. It is no news that the nation is sometimes worse affected by high crude oil price as it has to import petroleum products at higher prices. The only hope of reversing that is to have a robust local refining base which can only be achieved soonest by rehabilitating the refineries. There is nothing wrong with building new ones as some have argued. But there are two things involved – time and money. Nigeriacurrently does not have either as it needs to act urgently to exit the catch-22 situation it finds itself. Under the circumstances, fixing what it has appears to be to most attractive option. It is also not true that the $1.5bn approved for the rehabilitation can get Nigeria a new refinery. If in doubt, go and ask Dangote who is currently building one in the country.

    The most seductive of all the arguments that have been proffered against the rehabilitation of the Port Harcourt refinery is that which has to do with the global gravitation towards renewable energy. This was essentially the argument put up by the erudite Professor Pat Utomi that since the world is going renewable with a foreseeable end for the fossil fuel age, investing $1.5bn in the rehabilitation of a refinery is a waste. As sound as this argument looks, it does not take cognizance of the fact that the situation in Nigeria, and indeed the entire sub-Sahara Africa, is a little different from the global scenario. Indeed, while the developed world is moving rapidly towards renewable energy, there is little or nothing on ground in sub-Sahara Africa that indicates that it is in that race. This reality was captured by the International Energy Agency (IEA) Outlook 2019 which predicted that demand for fossil fuels will grow in Africa by 45%. The report also showed that fossil fuels would make up 60% of the African continent’s energy mix in the next 40 years. If in doubt, look up the IEA report at: https://www.iea.org/reports/africa-energy-outlook-2019. With such a projected huge market for fossil fuels on the continent, it cannot be a pragmatic step for Nigeria to abandon its refineries as is suggested by the pseudo-experts. Rather, the pragmatic step would be to position the country to take advantage of that situation by revamping its refineries to play a major role in that market.

    The other argument being floated against the refinery rehabilitation is that borrowing money at a time of dire economic constraints like this to fix the refineries would only dig the nation deeper into the debt trap.This happens to be one of the many areas in which the current rehabilitation project is different from all previous attempts. Borrowing money comes with a responsibility, especially when the lending body a bank. You must be able to prove that the project for which you need the loan can generate enough money to pay back the loan. Besides this, the other advantage of external financing like the Afreximbank loan is that it will remove opacity and force efficiency that could make the refinery perform well enough to repay the loan. This tends to obviate the chance of the loan becoming a burden that coud get the nation stuck in a debt trap as canvassed by critics.

    But the most compelling argument for the rehabilitation of the Port Harcourt Refinery at this time, which most of the experts have refused to see, is the need for an alternative to the upcoming Dangote Refinery. As good as the news of the Dangote Refinery sounds to the ear, it must be noted that it is a private sector refinery and that the owner is in business to make money. This imposes a greater responsibility on the Nigerian government to ensure that it does not create a private sector monopoly that could take advantage of the citizens. The immediate answer to this is to fix the Port Harcourt Refinery which is the largest of the government-owned refineries at 210,000 barrels per stream day capacity. It may not be as big as the Dangote Refinery, but it could go a long way in mitigating its monopolistic tendency. It is just like what the NNPC Retail is doing in the downstream sector. It may not have as many outlets as the major and independent marketers put together. But its presence in the sector helps moderate their excesses. If there were no NNPC Retail outlets, just imagine what the major and independent marketers would do with the price of petrol at times like this! Without a functional local alternative refinery, we may just be putting Nigeria and Nigerians at the mercy of Dangote!

    Perhaps, the experts and critics have not thought about this. It may not be as a result of intellectual laziness. That is simply how sentiments work, it blinds even a genius to what is otherwise obvious to an ordinary man. There is, therefore, need to eschew the sentiments and sensationalism and embrace the wisdom in the Port Harcourt Refine rehabilitation project.

    Sadly Jattu, an energy lawyer and public affairs analyst, wrote from Abuja.

  • Reps to investigate FG’s $1.5bn budget for rehabilitation of Port Harcourt refinery

    Reps to investigate FG’s $1.5bn budget for rehabilitation of Port Harcourt refinery

    The House of Representatives has mandated its committee on Petroleum Resources Downstream to organise an investigative hearing to ascertain the true state of the Port Harcourt refinery which the Federal Government has approved the sum of $1.5billion for the rehabilitation.

    The House also mandated the committee to carry out a comprehensive audit of funds previously spent on the Port Harcourt refinery and other refineries across the country.

    This decision follows a motion moved as a matter of public importance by Representative Onofiok Luke.

    The lawmakers expressed worry that so much had been spent on maintaining and rehabilitating the refineries but the outputs have barely improved.

    They also asked the Federal Government to grant licenses and provide incentives for the construction of modular refineries.

    TheNewsGuru.com, TNG reports that the Federal Executive Council last week approved $1.5 billion for the rehabilitation of the Port Harcourt refinery which is said to commence immediately.

    The Minister of State for Petroleum Resources, Timipre Sylva, who made the announcement after the FEC meeting said the rehabilitation will be carried out in three phases.

    Sylva said the first phase will be completed in 18 months which will take the refinery to a production of 90 percent of its capacity, the second phase will be completed in 24 months, while the final phase will be completed in 44 months.

  • FG reveals plans to also rehabilitate Warri, Kaduna refineries

    FG reveals plans to also rehabilitate Warri, Kaduna refineries

    The federal government is planning to also rehabilitate the Warri and Kaduna refineries following the approval of the Federal Executive Council to rehabilitate the Port Harcourt Refinery.

    TheNewsGuru.com (TNG) reports Timipre Sylva, Minister of State for Petroleum Resources made this known on Tuesday after the First Quarter 2021 Ministerial Governance Meeting in Lagos State.

    “Last week Wednesday, FEC approved a comprehensive rehabilitation of the Port Harcourt Refinery.

    “It was approved for the sum of $1.5 billion and we are going to also start the rehabilitation of Warri and Kaduna refineries shortly,” Sylva said.

    The Minister, however, did not provide details on the proposed rehabilitation of the Warri and Kaduna refineries.

    However, he went further to say almost 50 per cent of companies who won the bid for Nigeria’s 57 marginal oilfields have paid their signature bonuses.

    He revealed that the FG is targeting about $500 million in signature bonuses from the successful companies in the bid rounds which began on June 1, 2020

    Sylva said: “The process has been concluded. Letters have gone out and people have started paying their signature bonuses.

    “We have received almost 50 per cent of the signature bonuses already. 161 companies were allocated marginal fields.

    “I think this is the best we could have gotten. If you followed the process, you will see that we published it and people applied, the companies were pre-qualified and assessment of their bids were done by competent persons.

    “That was how the bidders emerged. It was a very transparent process”.

    Sylva reiterated that the government had not increased the price of Premium Motor Spirit, warning that marketers selling above the approved price band would be sanctioned by the regulatory agency.

    Sylva sets priority targets for Pet. Ministry in 2021

    Declaring open the First Quarter 2021 Ministerial Governance Meeting, Sylva listed three priority areas for the ministry and its agencies in 2021.

    Sylva said the areas were passage and implementation of the Petroleum Industry Bill (PIB), increase in crude oil production and increase in domestic refining capacity.

    He said that the ministry was given nine priority targets by the government, noting that six of the targets had already been achieved through collaborative efforts of the ministry and its agencies.

    Sylva said: “It Is my expectation that appreciable progress in the other areas would be made this year.

    “For emphasis, these areas include: the Passage and implementation of the PIB, increase in crude oil production to three million barrels per day and increase in local refining capacity.

    “In the last 20 years, PIB has remained the most debated issue in the Nigerian Oil and Gas Industry.

    ”Following the renewed cooperation within the Ministry and its sister agencies backed by President Muhammadu Buhari, the PIB is now before the National Assembly.”

    According to him, when passed into law, it will guarantee a robust upstream fiscal framework beneficial to both government and investors.

    He said that it would also unlock several midstream and downstream infrastructure opportunities to further enhance domestic oil and gas and their derivatives’ utilisation.

    “With respect to the crude oil production, I am confident to announce that Nigeria currently has the capacity to deliver three million barrels per day.

    “However, our commitments to OPEC+ cut has obligated us to shut in several producing wells as well as further activities to bring additional production on stream.

    “This is now paying off in the area of higher global oil prices leading to higher government revenue locally,” Sylva said.

    He said that the Federal Executive Council’s approval for the rehabilitation of the Port Harcourt Refinery at the sum of $1.5 billion would be followed shortly by the rehabilitation of the Warri and Kaduna refineries.

    Sylva said the ministry would continue to support other private I nitiatives at increasing local refining capacity.

    He said the ministry’s achievements in 2020 despite the COVID-19 pandemic include the Roll-out of the Auto Gas Initiative, establishment of the National Gas Expansion Programme and the Flag off of the National Gas Transportation Network Code.

    The minister cited others as the completion of the Marginal Oilfield Bid Round, commencement of the construction of the Ajaokuta-Kaduna- Kano (AKK) gas pipeline and the successful review of Sector Wide Domestic Gas Pricing.

  • We need $10 billion to build new refinery in Nigeria – NNPC

    We need $10 billion to build new refinery in Nigeria – NNPC

    The Nigerian National Petroleum Corporation (NNPC) has said a whopping $10 billion is needed to build a new refinery in the country, far beyond the $1.5 billion earmarked for the rehabilitation of the Port Harcourt refinery.

    TheNewsGuru.com (TNG) reports Mele Kyari, NNPC Group Managing Director, disclosed this on Monday in Abuja while engaging newsmen on issues emanating from the proposed rehabilitation of the Port Harcourt refinery approved by the Federal Government last week.

    Kyari further elaborated on the sum, stressing that to construct a refinery the size and nature of the Port Harcourt refinery in the country, it will cost the federal government around 7 billion dollars and 12 billion dollars.

    He, however, stressed the country does not have the financial muscle now to build a new refinery going by the economic situation of the country.

    He also said that the country would have to live with importation of petroleum product, especially Premium Motor Spirit (PMS), for another four years if the country ventures into building a new refinery.

    “We have people saying why not build a new one; why will you repair an old refinery with 1.5 billion dollars? The fact is available even by Google search, what it takes to build a refinery of this status today.

    “It will be difficult for the country to build a new refinery as it will take four years for it to commence production. It is around 7 billion dollars and 12 billion dollars to construct a refinery of this nature (Port Harcourt refinery).

    “This is the estimate you see in public space and there are things you do outside the construction battle-limits like the utilities that are never accounted for when estimates of this nature are done.

    “Typically, there is an additional 25 per cent cost for construction battle-limits, so, when you say a refinery can be built at 7 billion dollars or even 10 billion dollars, also think of that 25 per cent.

    “With today’s estimate, you cannot build a refinery at any cost below these amounts, that means that the option you have is to scrap this and build a new one, and we all know that we don’t have that resource.

    “If we start a new refinery of this nature today, it can’t work in less than four years, therefore, it means we will continue to import petroleum products in the next four years or more,” Kyari said.

    According to him, the country did not do well in maintaining the refineries in the past 25 years as the last turnaround maintenance of the Port Harcourt refinery happened 21 years ago.

    He noted that the huge cost of rehabilitation of the refinery witnessed in this present time was as a result of poor maintenance of the plant over a period of time

    “What we are seeing today is the cumulative effect of our lack of doing proper maintenance over a period of time but something has changed today and this is why we are proud to tell Nigerians that we have done something different in the background.

    “This is because we have a government that allowed us to play our role without interference in terms of our procurement exercises and this made the process go unhindered.

    “This has also allowed us to involve every stakeholder including NUPENG and NEITI, to ensure openness and accountability of the process,” Kyari said.

    We are doing rehabilitation, not turnaround maintenance – NNPC

    Meanwhile, on Monday also, elaborating on the Port Harcourt refinery, Kyari explained that the 1.5 billion dollars approved for the refinery was for complete rehabilitation and not turnaround maintenance.

    Kyari said that the refinery would work in optimal capacity at the completion of rehabilitation programme.

    “We are not doing turnaround maintenance, we are doing rehabilitation of the refinery, and it is very different; it means that we are replacing certain major components.

    “We are introducing some items that ordinarily we won’t need to do in turnaround maintenance and there are major shift in the status of the plant that we have to do and it is not done during turnaround maintenance.

    “During rehabilitation, by the 18th month, part of this plant will begin to produce particularly the gasoline plants.

    “In rehabilitation, we normally don’t shut down the plant completely, we repair a segment of it, and then it starts working, and then, you move to the next segment.

    “You continue to scale up and that is why, within the four-year period, the contractor would have completely left your premises.

    “What it means in a technical sense is that in 18 months, we will see production coming from that plant; we will follow it plant by plant until we are completely done,” Kyari said.

    The NNPC GMD also said that the process of rehabilitation started about 10 years ago but was slowed down due to a number of mistakes that occurred along the line.

    He, however, noted that an Italian company had been contracted for the job with one billion dollars financing arrangement from the Afreximbank.

    “This process started 10 years ago and a number of mistakes happened leading to the enormous delay we have seen in this process because there were a lot of interferences in the past but these are gone.

    “Initially, we thought that the best way to go was to go to the original builder but it wasn’t the right strategy.

    “Another way of making this project work was the introduction of borrowing for the repair work because when you borrow, the lenders will put conditions and one of the conditions is that it should be maintained under ‘own and earn’.

    “This means that the NNPC will not operate this plant as a basic requirement of the financing institution. The financing partner will ensure that the contractor will work efficiently.

    “Importantly is that the contractor O&M gave a guarantee that the facility will operate for the duration of the loan and the fact the project will be done under a financing structure supported by Afreximbank.

    “The bank has promised a 500 million dollars loan in the first instance and additional 500 million dollars making it one billion dollars and the condition is for the loans to be repaid from the operations and proceeds of this plant,” Kyari added.

    He expressed optimism that the refinery would work optimally for the next 15 years after the rehabilitation.

  • $1.5bn P/H refinery rehabilitation: Hold me accountable for every cent spent, Timipre Sylva tells Nigerians

    $1.5bn P/H refinery rehabilitation: Hold me accountable for every cent spent, Timipre Sylva tells Nigerians

    The Minister of State for Petroleum Resources, Timipre Sylva, has promised to ensure that every cent of the $1.5 billion proposed for the rehabilitation of the Port Harcourt refinery is accounted for.

    The minister asked Nigerians to hold him responsible in the event of anything otherwise.

    “I can look at the camera; they (Nigerians) can hold me accountable and hold this government accountable for every dollar, every cent on this project and ensure that we deliver a refinery that works,” the minister said.

    TheNewsGuru.com, TNG reports that the decision of the Federal Government to rehabilitate the refinery in Rivers State with the sum has triggered debates in the country.

    While the government’s critics accused it of corruption, others were concerned that adding such an amount of money to the country’s debt burden would be dangerous.

    Sylva, however, stated that there was no cause for alarm as the government does not intend to borrow all the funds to rehabilitate the refinery.

    He noted that a subsidiary of the Nigerian National Petroleum Corporation (NNPC) – Nigerian Petroleum Development Company Ltd (NPDC) – and others would contribute the money to be used for the project.

    According to the minister, part of the money will come from NNPC’s internally generated revenue and the Federal appropriation, while a little fraction will come from the African Export-Import Bank (Afreximbank).

    He also explained how the repayment plan was designed, saying the operations of the refinery would pay back the funds to be used.

    “The NNPC is going to spend about $200 million from its internally generating revenue sources, while the Federal appropriation will put in about $800 million and it is already broken down into three parts,” he disclosed.

    Sylva added, “The 2020 appropriation will give $350 million, 2021 appropriation will give another $350 million, and 2022 appropriation will give another $100 million, making it all $800 million from appropriation, and then the rest of it will now come from Afreximbank.”

  • Fayemi faults FG’s planned rehabilitation of Port Harcourt Refinery, says ‘Dangote’s own underway’

    Fayemi faults FG’s planned rehabilitation of Port Harcourt Refinery, says ‘Dangote’s own underway’

    Chairman of the Nigerian Governors’ Forum and Ekiti State Governor, Kayode Fayemi, has said that more information is needed to justify the rehabilitation of the Port Harcourt refinery.

    TheNewsGuru.com, TNG reports that the Federal Executive Council had on March 17 approved $1.5 billion for the rehabilitation of the Port Harcourt refinery which is said to commence immediately.

    Recall that Timpre Sylva, the Minister of State for Petroleum had told journalists in Abuja that the first phase will be completed in 18 months which takes the refinery to a production of 90 per cent of its capacity, the second phase will be completed in 24months, while the final phase will be completed in 44months.

    But Fayemi who spoke on Friday on a monitored Channels Television programme faulted the planned project, noting that a private refinery built by Africa’s richest man, Aliko Dangote is underway.

    “I wouldn’t have taken that decision given the fact that we know that a big refinery, private-sector driven is coming on stream but I don’t have the information that led to that decision at first,” he stated.

    “When you are outside a decision-making frame, there is some information that may not be available to you if you look at it at the pure face value. It may not be justifiable but we don’t have all the information responsible for that decision.”

  • Why $1.5bn for repair of Port Harcourt refinery is suspicious – Atiku

    Why $1.5bn for repair of Port Harcourt refinery is suspicious – Atiku

    Former Vice President Waziri Atiku Abubakar has said the $1.5 billion earmarked for the repair of Port Harcourt refinery in Rivers State by the President Muhammadu Buhari’s government is suspicious.

    Atiku stated this on Thursday, stressing that a similar, more profitable refinery, Martinez Refinery in California, USA was recently sold by Shell Petroleum Development Company for $1.2 billion.

    Recall that the federal executive council (FEC) presided over by President Buhari on Wednesday approved 1.5billion dollars for the rehabilitation of the Port Harcourt Refinery.

    Minister of State for Petroleum Resources, Timipre Sylva, who made this known, said the rehabilitation was in fulfilment of Federal Government’s desire to resuscitate the country’s refineries to reduce the cost of processing petroleum products as well as boost the economy.

    However, reacting, Atiku in a statement, posited that the best solution for the nation’s refineries is to privatise them to be more effective and efficient.

    He stated that to budget the sum of $1.5 billion to renovate or turn around the Port Harcourt Refinery appears to be an unwise use of scarce funds at this critical juncture for an assortment of reasons.

    He wrote: “That Nigeria’s economy is in dire straits is a fact well known both to the nation and to our international partners. Unemployment has just reached an all-time high of 33%, while inflation has hit another record high of 17%.

    “At this critical period, we must as a nation be prudent with the use of whatever revenue we can generate, and even if we must borrow, we must do so with the utmost responsibility and discipline.

    “To therefore budget the sum of $1.5 billion to renovate or turn around the Port Harcourt Refinery would appear to be an unwise use of scarce funds at this critical juncture for an assortment of reasons.

    “First of all, our refineries have been loss-making for multiple years, and indeed, it is questionable wisdom to throw good money after bad. At other times, I have counselled that the best course of action would be to privatise our refineries to be run more effectively and efficiently.

    “Moreover, the cost appears prohibitive. Too prohibitive, especially as Shell Petroleum Development Company last year sold its Martinez Refinery in California, USA, which is of a similar size as the Port Harcourt refinery, for $1.2 billion. We must bear in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery.

    “Given this discrepancy, might we ask if there was a public tender before this cost was announced? Was due diligence performed? Because we are certainly not getting value for money. Not by a long stretch.

    “We cannot as a nation expect to make economic progress if we continue to fund inefficiency, and we are going too deep into the debt trap for unnecessarily overpriced projects.

    “Our national debt has grown from ₦12 trillion in 2015 to ₦32.9 trillion today. Indeed that is shocking enough to cause us to be more prudent in the way we commit future generations into the bondage of bonds and debt”.

  • Why I won’t rejoice over FG’s approval of $1.5bn to rehabilitate Port Harcourt refinery – Wike

    Why I won’t rejoice over FG’s approval of $1.5bn to rehabilitate Port Harcourt refinery – Wike

    Rivers State Governor Nyesom Wike has said he will not rejoice over the approval of $1.5 billion for the rehabilitation of the Port Harcourt refinery.

    Wike said it is not the first time the Federal Government is making promises, many of which he says are yet to see the light of day.

    “We have had a lot of promises, we have had a lot of talks and nothing has materialized,” Wike stated on a monitored Channels Television programme on Wednesday.

    TheNewsGuru.com, TNG reports that the Federal Executive Council yesterday approved the plan by the Ministry of Petroleum Resources to rehabilitate the Port Harcourt Refinery with $1.5bn.

    In reaction to the development, Governor Wike said the news was nothing to make anyone jubilate. According to him, promises of this nature are only pointers to the fact that elections are around the corner.

    “We have heard these promises and nothing has happened,” Wike stated.

    He further opined that “If the refinery is going to work, it will improve a lot of economic activities, there will be employment for the people of the state. We will be happy but I am saying that we have had these promises and promises and nothing has happened. So, I don’t want to begin to say hallelujah. Let us wait and see what will happen based on the approval and the statement made by the minister of state, petroleum. We will hold him accountable for it.

    “We know, even before the (APC) government came into being, they have promised a lot of things and later they come up to say because of these challenges and that, they are not able to fulfill them.

    “We are going into 2023, so many promises will be made, so many approvals will be made.”

    The governor said rather than jump in excitement regarding the approval by the Federal Executive Council, Nigerians must wait and see how the government acts on the rehabilitation exercise as promised.