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The Truth About NNPC New Model By Ebe Kachiku by Danmas: 9:42pm On May 03, 2016 |
Lagos — 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 the same 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.
ARTICLE CONTINUES AFTER ADVERTISEMENT
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. allafrica.com/stories/201605031081.html |
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