By Mohammed Shosanya, Lagos | Publish Date: May 3 2016 5:47AM.
When the federal government recently unveiled plans to
enter into a Joint Venture (JV) arrangement with investors to fund, rehabilitate and jointly operate Nigerian refineries, views of Nigerians became divided. Some view the development as proactive while others see it as another way of privatising the plants by the Buhari-led administration. Our reporter analyse the view points.
The Nigerian National Petroleum Corporation (NNPC) recently said the Turn Around Maintenance (TAM) for the Nigeria’s four refineries gulped about $22 million, saving taxpayers $1.57 billion from the $1.6 billion earlier voted for the projects.

The NNPC said $10 million, about 48 per cent of the total
expenditure, was spent on the two refineries in Port Harcourt.
The $22 million expenditure was a huge reduction from the
$216 million, which the Sani Abacha-led regime spent for thesame purpose.

The federal government is said to have spent over $2.036
billion on the TAM of the country’s refineries in the last 13
years.
The administration of former president Olusegun Obasanjo
had set aside $369 million for the TAM of the nation’s four
refineries, while the Abdulsalami Abubakar and Sani Abacha
regimes spent $92 million and $216 million, respectively for
the same purpose. In 2007, the NNPC claimed it awarded the contract for a comprehensive TAM on all the refineries to a Nigerian firm.
The sum of $1.6 billion was voted for TAM of the four
refineries across the country by the end of 2014. The 150,000 bpd Port Harcourt refinery was built in 1989. TAM operations were carried out in 1991, 1994 and 2000.
The Kalu Idika Kalu Committee had, in May 2013 during a visit to the Port Harcourt Refinery, discovered its four boilers were not operative. Two out of the four power plants were dysfunctional.

Besides, the committee found that there was evidence of
poor maintenance with serious corrosion of major key units,
just as morale of the workers was low and management was
dysfunctional with little or no financial authority.
The inoperative state of the refineries, for a long time, threw the nation into crisis, making the importation of oil into the country became an all-comers affair and fraudulent.

In his argument, the president of the Nigeria Labour
Congress (NLC), Comrade Ayuba Wabba, at this year’s May
Day celebration in Abuja, urged the federal government to
effectively fight corruption in the nation’s oil and gas sector.
He said if corruption is arrested in the sector, the huge
amount used in importing refined petroleum products could
go into other productive ventures in the economy.
No doubt, it is regrettable that maintenance of the nation’s
refineries by previous governments were carried out at high
costs. Yet, despite the questionable amounts spent on the
maintenance, the refineries have remained unproductive,
leaving Nigerians to wonder whether the assets were actually rehabilitated or used as avenues of siphoning resources.
But the NNPC said the current JV deal on the three
refineries, namely, 210,000 barrels per stream day (BPSD)
Port Harcourt Refinery, Warri and Kaduna refineries with
combined refining capacity of 445,000 bpsd, will also include, but not limited to, off-take of refined products for sale primarily in the Nigerian market. The corporation said the refineries will be jointly operated by NNPC and the selected investors for a defined period, until investments are fully recovered.
The Nigerian Union of Petroleum and Natural Gas Workers
(NUPENG), however, picked holes in the arrangement and
warned the NNPC of the dangers of partnering investors as
joint technical partners for the rehabilitation and operation of the refineries.

NUPENG also expressed its reservation over NNPC’s
invitation of pre-qualification for rehabilitation, upgrade,
operatorship, management, maintenance and security of
NNPC jetties, storage depots and pipeline infrastructure on
joint venture partnership basis.
The union said: “NUPENG believes that the current move by
the NNPC is a form of privatisation, through the backdoor, of our national assets which is doomed to fail and bring about more hardship to the citizens, just the way the Power Holding Company of Nigeria (PHCN) privatisation failed to bring the desired results but darkness all over the country.
It stated that for security reasons and in the interest of
protecting the jobs of oil and gas workers, the planned
partnership will be resisted by NUPENG.

It added that no investor will want to put his money in the
joint venture partnership arrangement without having a say in the running of the refineries, storage depots and jetties.
Similarly, a leader in the nation’s oil sector has faulted the
modality employed by the authorities to refurbish the
refineries, saying it smells of government’s desire to sell the
refineries under the guise of joint venture.
An oil and gas expert, Bola Andrew, however, said there is
nothing wrong with the arrangement the government intends to employ to rehabilitate the refineries and efficiently run the facilities.

He said: I believe there is nothing wrong with the joint
venture between the federal government and partners to run the refineries. So, there is no cause for alarm over the
implementation of the deal. For me, the joint agreement will be a clear departure from the previous manner of turning around the nation’s refineries for efficiency and profitability.”
Stakeholders in the oil and gas sector are, therefore, waiting
to see whether or not the intended model to refurbish the
nation’s refineries would work, buoys the country’s refining
capacity and minimise oil products importation.

Source : http://www.dailytrust.com.ng/news/business/the-huddles-in-nnpc-s-new-model-to-revive-refineries/145111.html