The news, far away in the Austrian capital of Vienna couldn’t have surprised any Nigerian that has paid more than fleeting attention to the woes routinely visited on the hapless country by Nigeria’s perennially delinquent entity – the Nigerian National Petroleum Company Limited (NNPCL). Whether in its old drab colours of opacity and sleaze, or its mutation into everything that a supposedly retooled business entity should never aspire, you are guaranteed that nothing good or exciting ever comes out of its quarters.
A little while back, precisely two months ago, Nigerians woke up to the news that the refinery, just refurbished six months prior, and one which had gulped $1.5 billion in hard-to-get forex, has been shut down for ‘maintenance’. The public notice, by Olufemi Soneye, the then chief corporate communications officer of the company had read: “The Nigerian National Petroleum Company Limited (NNPC Ltd) wishes to inform the general public that the Port Harcourt Refining Company (PHRC) will undergo a planned maintenance shutdown. This scheduled maintenance and sustainability assessment will commence on May 24, 2025.
“We are working closely with all relevant stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to ensure the maintenance and assessment activities are carried out efficiently and transparently,” so went the notice to a bewildered nation.
Although nothing in the statement suggested any timeline for the maintenance, this week, Thursday July 24 makes it exactly two months since the refinery was shut down. If Nigerians had assumed that the abrupt maintenance, which some newspapers actually reported would take 30 days, was ‘routine’, the rather interminable silence ever since, and subsequent developments may have hinted at the manifestation of the old plague in the behemoth, in its full malignancy.
Between May 24 and Ojulari’s Vienna outing of last week, the pieces, may finally be coming together. A month after the shutdown, operatives of the EFCC reportedly arrested a former Chief Financial Officer of the NNPC, Umar Isa. This was said to be in connection with an alleged $7.2bn fraud linked to the rehabilitation of the three refineries in Kaduna, Warri, and Port Harcourt. At stake was the $1,559,239,084.36 allocated to the Port Harcourt refinery, $740,669,600 released for the Kaduna refinery, and $656,963,938 approved for the Warri refinery.
As reported by Punch: “All key officials involved in the maintenance and other major NNPCL projects are also under investigation for alleged abuse of office, corruption, diversion of public funds, and kickbacks from contractors”. Former Managing Director of the Warri Refinery, Jimoh Olasunkanmi, was also among those arrested.
And just like the old African fable about the witch said to have cried all night only for the dawn to herald the death of the baby of the house, Bayo Ojulari, the NNPCL helmsman would appear to be at his wits end to find matching words to what is going on!
Here is what he told Bloomberg at the 9th OPEC International Seminar in Vienna, Austria on the state of the refineries: “So refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged. Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated,” he was quoted to have said.
“But what we’re saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now”.
I believe I know what NNPCL-GMD Ojulari stopped short of saying. While he may not have declared the process, from design to execution, as being incurably bad – particularly the idea of retrofitting the old, antiquated 60,000 barrels per day refinery for what would at best deliver 90 percent performance at the optimum level – he nonetheless left no doubts about his conviction that the entire idea could only have made political, certainly not, business sense!
And while he was also not categorical on the way to go, he also somewhat implied that the entire $1.5 billion may have gone down the drain considering the nigh impossibility of realising anything near that figure in sales value.
Note his allusion to an implied bad investment decision; his retort about the flawed technologies in place and by extension the fatal admission to what is already deemed, an ill-thought out process. Never mind the implied joke that the country should not only write them off as scraps and so move on with whatever terms of sale the auctioneers might deem to be comfortable with, (after it is merely another line item in the criminal schemes that the country has been serially afflicted with) – which was what those behind them intended, anyway; it was, for him, sufficient to put all the cards on the table for all Nigerians to see!
Uncomfortable as it is, the issue seems unlikely to go away. By this I mean the question of the future of the four refineries. At this time, the signs, even to the most incurable optimist, must be deeply unsettling, more so, with the latest revelations by Ojulari. While the focus at this time is on the old refinery in Port Harcourt, the auguries would appear to be the same for the other Port Harcourt refinery as they are of the other two in Warri and Kaduna.
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Yet again, we are being reminded of the folly of 2007. Then, Nigerians, supposedly for the love of country, rejected the sale of the refineries in Port Harcourt and Kaduna to Bluestar Consortium put up by businessmen Aliko Dangote and Femi Otedola. Whereas the argument was that the process was flawed, in reality, it turned out that Nigerians would rather hold on to their beloved but utterly useless ‘patrimony’ even when such had long lost its rationale as a going concern. Now, we are back to learning the hard way, the fine lines between hard business decisions and hollow nationalist effusions!
Only last week, a colleague wanted my view on what I believe should be the way forward. I thought the answer was simple enough: Selling the contraptions remains the way to go! As it was in 2007, so it is even today. It is even more pressing now that Nigerians – unlike what they were led to believe years back – no longer harbour any worries about whether the fuel being discharged at the pumps is Dangote’s or NNPCL’s petrol!
Here’s hoping that the usual quarters would spare Nigerians their hollow, noxious and uneducated computations of what the value of the refineries should be! As yours truly is wont to say, only the investors, as against our hordes of arm-chair valuation experts, understand the meaning of values in any real sense! After all, you can’t, for the pain of refurbishing your old Toyota Camry insist on selling it as new only because the engine, tyres, suspension and other critical components are supposed to be brand new!
But that should not come without proper accounting for the money spent and the value delivered. At this time, Nigerians and relevant agencies should be asking Maire Tecnimont SpA and the NNPCL, hard questions about the terms of the contracts and what has been delivered. Are there protection clauses or implied warrantees on which the NNPCL could draw upon? Old or not, it is unimaginable that a thoroughly refurbished refinery will break down after barely six months of use. The same question obviously applies to Daewoo Engineering & Construction Nigeria Limited, the contractor in charge of Warri and Kaduna refineries. Or are we dealing with another Process & Industrial Developments Ltd (P&ID) here?
