http://nationalmirroronline.net/new/fg-set-to-privatise-four-refineries-in-2014/
http://nationalmirroronline.net/new/fg-set-to-privatise-four-refineries-in-2014/

Plans have been concluded by the Federal Government to privatise the nation’s four refineries from the first quarter of next year.

The planned privatisation was disclosed in London yesterday by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke. She spoke in an interview with Bloomberg TV Africa She said: “We would like to see major infrastructural entities such as refineries moving out of government, “Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over all these years.”

She said a presidential audit of the facilities last year recommended their sale due to inadequate government funding and “suboptimal performance.”

The minister said the refineries, which have a combined 445,000 barrels-aday capacity, should be privatised within 18 months, according to the report submitted to President Goodluck Jonathan in November 2012.

Bloomberg stated that while Nigeria is also Africa’s top crude exporter and the most populous with more than 160 million people, it relies on fuel imports to meet more than 70 per cent of its needs.

It said: “Its state-owned plants operate at a fraction of their capacity because of poor maintenance and aging equipment. The West African nation exchanges 60,000 barrels a day of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Ivory Coast.” “We are right now undergoing a major turnaround maintenance programme” of the refineries, Alison- Madueke said.

The Nigerian National Petroleum Corporation, NNPC, stated that improvements to the twounit 210,000 barrel-a-day Port Harcourt refinery, the country’s biggest, will be completed by the end of the year, to be followed by enhancements at the Warri and Kaduna sites in 2014.

The corporation added that Warri has a daily processing capacity of 125,000 and Kaduna 110,000 barrels. The state of the oil industry has remained a major challenge for the nation’s economy as it is seen as the bastion of corruption with huge revenues ending in private pockets while oil earnings have not largely reflected on the standard of living of Nigerians.

The privatisation of the refineries is seen as a key factor in ending the massive corruption that has characterised the fuel importation and subsidy programmes in recent years under system controlled by government officials and well-connected businessmen.

Following a recent report by Swiss non-governmental advocacy organisation, detailing how the NNPC and the Swiss oil trading companies allegedly duped the country of over $6.8bn, the House of Representatives has commenced an investigation.

The report by the Berne Declaration, titled “Swiss Traders Opaque Deals in Nigeria”, catalogued the “letter box companies” modus operandi employed by the alleged partners to defraud the country of over $6.8bn, noting that such a fraud is the greatest in Africa.

The NNPC has rejected the report as untrue. The report said: “No less than $6.8bn of unjustifiable subsidies were paid out in 2009 and 2011 – that is the equivalent of nearly four times the Nigerian health budget for 2013. “The all-powerful national company, the NNPC, categorised as the most opaque national oil company on the planet, itself is evidence of Nigeria’s ‘resource curse’ at work.”

The first and third largest Swiss enterprise in terms of turnover in 2012, Vitol and Trafigura, outclassed their competitors through opaque partnerships with the NNPC to defraud Nigeria, it said. It notes that more than half of Nigerian crude oil exports pass through Switzerland and that Nigeria is the only major producing company that sells 100 per cent of its crude oil to private traders, rather than marketing it itself and benefiting from the resulting added value.

It further gave instances to show how oil sales between the NNPC and the Swiss partners were carried out at prices lower than the market rates, adding that seven of the Nigerian ‘importers’ involved in this fraud have a subsidiary in Switzerland.

The report indicts the NNPC thus: “Swiss traders do not acquire this crude oil based on public and transparent calls for tender… each year the NNPC grants the allocations of exports under obscure conditions and on the basis of criteria that are unknown outside the restricted circle of the decision makers.”

The Berne Declaration said the profit generated by NNPC and its Swiss partners escape state coffers, adding that any profits that are collected in Nigeria for the state don’t get through.

The NNPC has however denied the allegations saying the call for tender for this oil lifting contracts is periodically published by almost all the newspapers in Nigeria via paid advert placements. It also said no company has a monopoly or exclusive right to lift any quantity of Nigerian crude oil as the selection process was competitive while also dismissing claims oil was sold below market rates. The House report is expected in three weeks.



http://nationalmirroronline.net/new/fg-set-to-privatise-four-refineries-in-2014/
http://nationalmirroronline.net/new/fg-set-to-privatise-four-refineries-in-2014/