The planned rehabilitation of the nation’s refineries will cost the Nigerian National Petroleum Corporation (NNPC) about $1 billion, it was learnt at the weekend.
The NNPC Group Managing Director, Dr. Maikanti Baru, said the nation’s three refineries in Kaduna, Warri and Port Harcourt would be shut for rehabilitation to make them operate at full capacity.
The rehabilitation is also part of achieving the Federal Government’s aspiration of fully quitting petroleum products import by 2019.
Baru said the refineries would come back on stream as new facilities when the NNPC concludes the rehabilitation ahead of the country’s plan to end petroleum products import in 2019.
The Corporation has set up eight committees that would work on the blueprint on how to make the refineries work at their installed capacities. The committees include the workstations for rehabilitation, stakeholder management, financing, legal, procurement, pipeline and crude oil supply and security, and staffing and succession planning.
When The Nation contacted the Group General Manager, Group Public Affairs Division of NNPC, Mr. Ndu Ughamadu, for a feedback on the project’s update, he said until the various committees submit their reports, it would be difficult to have an update.
According to him, the committees will ascertain the period it would take to get the refineries to the expected operational capacities. He also noted that the financing committee will determine the cost of the rehabilitation.
“The committtees will determine the modalities for rehabilitating the refineries. They will determine the amount that will be involved in the rehabilitation, how long it will last, when it will start and end, among others.
The Nation’s investigation, however, revealed that the cost of the rehabilitation would be about $1 billion and the funds will be sourced from external financiers as the government doesn’t have money. The financiers at the completion of the project will be paid back from incremental oil production and refining.
The companies that would handle the rehabilitation would be those that built the refineries, The Nation also learnt. The NNPC’s plan is to enter into agreement with the companies to ensure that refineries work at 90 per cent and above of their installed capacities, it was gathered.
Baru, on the sidelines of the maiden Nigerian Pipeline Security Conference and Exhibition organised by the Pipeline Association of Nigeria (PLAN), said: “Our intention is to shut down the refineries when we are ready, and then fully bring them back to what they should be as new refineries.”
“Obviously, it is going to be a complex procedure and as such, we have to breakdown the various work packages to ensure that all the workforce have sufficient focus. This time we inaugurated eight committees on the refineries’ rehabilitation.
“The work streams are composed of the general managers and those at the executive directors level and they will have a day-to-day look at it, while the steering committee is at my level and that of the chief operating officers all looking at the problems that the workstations have and they will proffer solutions immediately.”
“Over 28 expressions of interest (EoIs) had been received so far by NNPC from private funding sources for the refineries’ rehabilitation project. The corporation expects more EoIs by the end of the year.
“I am convinced that the teams we have selected will give the necessary direction towards returning the refineries back to their optimal levels of performance. The committees are expected to deliver well and within schedule because time was of the essence. We want to show everyone that we can fully run the refineries. You must all work together to operate them at 100 per cent capacity, as this is the only way to ensure profitability.”
