•Kyari defends decision to rehabilitate Port Harcourt facility

By Emmanuel Addeh

The Nigerian National Petroleum Corporation (NNPC) yesterday vigorously defended the approval of a whopping $1.5 billion for the rehabilitation of the Port Harcourt refinery, maintaining that apart from following due process, building a new refinery in the class of the one in Rivers will cost the federal government between $7 billion and $12 billion.

Group Managing Director of the corporation, Mallam Mele Kyari, who spoke in Abuja, stated that the decision to revamp the old facility was further taken because constructing a new refinery will take a period of four years, during which Nigeria must continue to import products.

The NNPC helmsman argued that there was no basis for comparison between the Port Harcourt refinery and the one sold by Shell in America for $1.2 billion in terms of capacity, describing the public comments emanating thereof as curious.

He disclosed that the actual cost of the project is about $1.34 billion, noting that the additional expenses include taxes and other duties that could come up.

“The real cost is $1.34 billion. Even then you could argue and say why you wouldn’t build a new refinery. We have also seen some curious comparisons that shell sold one of its refineries for $1.2 billion and that it’s even better than our own.

“This is mundane. Even a Google search will reveal that it was built in 1915 and it’s a 107,000 barrels per day refinery. It has been on shut down by the regulators since early last year. Not only that, when you buy a refinery you buy its assets and the liabilities,” he argued.

He maintained that many people do not know the financial transactions that go into some negotiations, saying that it is needless to compare a combined refinery of 210, 000 barrels to a much smaller and much older refinery which has many issues with regulators.

“Simple due diligence was not conducted before those comments were made. They have asked why we don’t just build a new one. What does it take to build a refinery of this status today? It’s anywhere between $7 billion to $12 billion to construct a refinery of this nature. This is what we call battery limit construction. That’s the estimate you see in the public space.

“There are things you do outside the battery limits like the tank and other utilities that are never accounted for when the estimates of this nature are done. That’s about 25 per cent of the total cost. So, when you say refineries can be built for $6 billion or even $10 billion, you should also think about the 25 per cent you will add to it,” Kyari said.

He said that another option would have been to scrap the current one and build a new one, but added that the resources are not available while the banking sector is not ready to put in the money because they no longer fund oil projects of that magnitude.

Kyari said that the refineries are national assets that must be used to ensure energy security for the country, maintaining that if a new refinery is started, it cannot become functional in less than four years, which means Nigeria will keep importing in the next four years.

According to him, even for national strategic purposes, that would be a wrong decision, with the last turn-around-maintenance of the Port Harcourt having been done 21 years ago.

The GMD stated that the current huge cost of rehabilitation was because the last turn-around-maintenance was badly carried out.

He posited that all stakeholders and agencies of the government were involved in the process leading to the award, saying that it wasn’t a TAM that was currently being carried out but total rehabilitation, which means that major components will be replaced, new items will be introduced and an upgrade of the plant.

Kyari argued that the process went through the Bureau of Public Procurement and other such bodies, saying that he was confident that the best decision was taken after the tender process.

He stressed that the process was delayed for the past 10 years because of unwarranted interferences and strategy problems, including going to the original refinery builders, which he said was the wrong thing to do.

Kyari said that the borrowing angle was introduced because typically, lenders will give conditions, one of which is an Operations and Maintenance contract arrangement, meaning that NNPC will not operate the plant, as it will be done in consonance with what he described as the best global practice.

“More than that, the contractors will give a guarantee that it will work for such a period of time. That’s part of the requirements which was absent in previous ones under the TAM arrangements,” he said.

He vowed that the plant will work and the loans will be repaid, saying that he was confident that in the next 15 years, the plant will still be running.

The NNPC helmsman said in 18 months, gas will be obtained from the plant and will eventually, scale up until the contractors leave the site, unlike a new one that will require the whole plant to be completed before it starts functioning.

According to him, the loan will be repaid from when the refinery becomes functional, adding that a refinery can produce a margin of $4-$7 per barrel which will be used to finance the loan.

“What we have done is to put in place a transparent process. This has not always been done. The EPC contract was thrown open. It has never been done. We have invited McKenzie to support us. We have taken the control from the NNPC, including the selection of EPC contractors,” he said.

https://www.thisdaylive.com/index.php/2021/03/23/nnpc-pushes-back-says-new-refinery-will-cost-fg-about-12bn/

Rather late than Never..

But just look at What our country is just doing in the 21st century, something we should have built dozens of it since 1957 and especially when we have the highest revenue in oil during the 16 years of looting and stealing.

Anything to move our Nation forward is what we are after.

Assuming the evil and looting party did something about this refinery in their 16 years of blind looting, we won't be talking about either Rehabilitation or Turnaround Maintenance by now.
Our country will not be where we are today if this party filled with criminals just built 2 refineries for us as a nation.

The looting party that even looted money donated for their National Headquarters.

And the most crazy thing is that their thieves online will never see any thing bad in the party they supported with 16 years of their miserable lives couldn't build just one refinery!
Shameless lots that should cover their eyes in shame.
Watch the 2 time losers start quoting this post.
Hypocrites everywhere

When you show some of them the unparalleled efforts of this government in development and colossal projects compared to all the past governments, then you will hear them wail...'well he has tried but I still don't like him, he is too old, he is slow, he is unintelligent, he is not outspoken bla bla bla'...

They are not interested in any development in Nigeria, if it means ascribing any success to PMB.

Every good news of the nation brings them sadness, and they remain quiet until another bad news crops up

If you tell them Buhari is building over 300 roads all over Nigeria, they say it is because of 2023

When you say Buhari is working to completing abandoned projects, over 8000 nationwide (Mambila hydro power, Ajaokuta Steel Plant etc), they say it is because he has no program of his own.

The enemies of the nation hate anything progressive to our darling nation.
This is the point where you will be able to confirm that these are people whose concern is not Nigeria's development.
Whose problem with Buhari is not performance but personal hatred etc.

This is why nothing tangible will be achieved if you engage them in any developmental discussion, when their concern is wotowoto-pettiness.

We will keep hitting all of una heads with facts and the undiluted truth!

My main concern is that 50% of that money will be looted

While the above poster is concerned about money to be looted, I am more concerned about the future of the whole thing.
You ask questions like;
Are these people in government following recent trends in automobile industries where various sources of energy other than crude oil are now being harness for a cleaner and eco friendly environment?
Do they know that top automobile industry will shut down production of crude oil powered vehicles in the nearest future?
If they know all these why indebt the nation in the future for the younger generation?

Bloody fraudsters cum criminals.They don start again.

They cannot maintain old refineries, they want to build new refineries. This country is a comedy of errors.

Only God knows when exactly we will be out of this shits

If they like, let them sell Nigeria to refurbish or build new refinaries.

Thieves! Even the Dangote 650,000 bpd refinery built at $2b plus is grossly over priced. It was used as front to steal and round trip dollars gotten cheaply from the CBN.

Gimme my share

I just want to wait for Peter Obi's comment before reacting to this.

That man knows one thousand and one ways of getting things cheaper but Nigerians keep living like we are as rich as the United States.

I have never seen a country so poor yet so wasteful like Nigeria.

Are they even sure.

Nonsense

Another story again.

THEY SHOULD BUILD A NEW REFINERY IN ALL THE OIL PRODUCING STATES.



WE SAY A BIG NO TO DANGOTE MONOPOLISATION OF SS OIL.

“This is mundane. Even a Google search will reveal that it was built in 1915 and it’s a 107,000 barrels per day refinery. It has been on shut down by the regulators since early last year. Not only that, when you buy a refinery you buy its assets and the liabilities,” he argued.

He maintained that many people do not know the financial transactions that go into some negotiations, saying that it is needless to compare a combined refinery of 210, 000 barrels to a much smaller and much older refinery which has many issues with regulators.

That is it, Nigerians do not make research before commenting and the rest just buy it and regurgitate. It is on the social media you will see stack illiterate and somebody that has not passed a simple WAEC arguing with an experienced, professional Engineer, lawyer or Medical Doctor. Them full Nairaland well well

WE DONT WANT REPAIR, WE KNOW THE MONEY WILL BE LOOTED, JUST BUILD A NEW REFINERY,.

How are we sure this rehabilitation won't be bad like the last turn around maintenance and the money wasted like that? We want the refinery to work but the people don't trust the government with loans.Governemnt didn't rehabilitate the refinery since it's now Dangote refinery is nearly completed they want to spend that amount for the portharcourt refinery.

This format dey always work for looting so I'm not surprised they keep using it.

But dangote can do it without making any headline? Why shame no dey catch this people. A single man can build a refinery but a while nation cannot? Shame on you people.

I AM TIRED. I AM WEAK. I AM CONFUSED. I DON'T KNOW WHAT TO THINK/DO AGAIN. THE BATTLE HAS BEEN LOST. I GIVE UP. I HAVE HEADACHE. THE ALWAYS SAY "THERE'S LIGHT AT THE END OF THE TUNNEL" BUT NAIJA TUNNEL TOO LONG ABEG. EGBON BUHARI, PLEASE STOP THE BUS, DROP US HERE, WE DON'T WANT TO GO AGAIN; KEEP THE CHANGE. I'M SERIOUSLY SURPRISED THAT SOME PEOPLE CAN STILL DEFEND THIS GOVERNMENT. BUT I DON'T BLAME THEM, AFTER ALL IT'S ONLY ONLINE. NONE OF THEM WILL COME OUT TO THE STREET, TO A NEWSPAPER STAND, TO A BAR, IN A BUS, OR ANY OTHER PUBLIC PLACE TO DEFEND BUHARI; HE/SHE WILL BE LYNCHED! !!

QUICK QUESTION: IF BUHARI DIES TODAY, WHAT MEME/PICTURE WILL BE YOUR REACTION:-

These useless people believe that they can always play on our intelligence.!!!

The truth is that this project can never be completed

Na lie o

Another Kyari, hmmmmm. Odinma. Nigeria being run by One region, sorry state, I mean family

dre11:
•Kyari defends decision to rehabilitate Port Harcourt facility



https://www.thisdaylive.com/index.php/2021/03/23/nnpc-pushes-back-says-new-refinery-will-cost-fg-about-12bn/

APC promised us, one per year, but now excuses as usual. $1,5bn can build 200barrel/day automated refinery. Give the contract, I will give you prototype.

APC already ammasing money for 2023 election because they know Tinubu won't help them

how much did dangote own cost? that yours should be $12 billion