THE Nigerian National Petroleum Corporation (NNPC) has gambled $1.5 billion on the financially battered Port Harcourt Refinery Company (PHRC), signing a contract with an Italian firm Maire Tecnimont S.p.A for the rehabilitation of the inefficient company.

Rather than privatise the refinery, the NNPC has chosen to pump an equivalent to 4.5 percent of Nigeria’s 2021 budget into the refurbishment of a refinery that comprehensively lost N152.89 billion between 2017 and 2019.

The corporation and its appointees have mismanaged the refinery over the years, but are still bent on continuing managing it against common economics sense.

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The ICIR analysis of PHRC’s 2017-2019 financial statements has shown that the refinery is in the red and needs something different from $1.5 billion to operate as an efficient business.

Directors, workers smile to the bank amid losses

In 2019, for example, the refinery did not record any revenue. Yet, it reported N25.19 billion in expenses. Six directors collected N59.65 million in fees, meaning that each of them received an average payment of N9.94 million a month in 2019 from a company that recorded no revenue. According to the NNPC, names of the six directors as of 2019 were: Group Managing Director of NNPC Malam Mele Kyari; Managing Director of PHRC Engr Abba Bukar (who retired in March 2020); Executive Director of Services Babatunde S. Sofowore; Executive Director of Operations Ganiyu Abiodun Owolabi; another Executive Director of Operations Engr Abel N. Imonighavwe; and Executive Director of Finance and Accounts Mrs Aramide M. Ekundayo.

A new Managing Director Engr Ahmed Dikko was appointed in March 2020, alongside a new Executive Director of Operations Mr Muazu M. Awaisu, and Executive Director of Finance and Accounts Mr Reginald M. Udeh. They were not among the directors in 2019.

To further buttress the level of financial recklessness in Port Harcourt refinery, the total number of staff as of 2019 was 675. Their salaries, wages , allowances, redundancy and pension costs amounted to N22.195 billion. What that means is that, on the average, each staff member received N32.88 million in 2019 from a company that made no revenue. This amounted, on the average, to N2.74 million each month.


Total salaries and pays received by staff of Port Harcourt refinery between 2017 and 2019 amounted at N80.57 billion. But revenues received by the company within the period were estimated at N6.27 billion – implying that the NNPC sought N74.3 billion from outside the refinery to pay staff salaries.

“In 2019, PH Refinery contributed zero revenue, but incurred costs of N47bn; almost N4bn a month! Instead of ending this nightmare through a #BPE core investor sale, #NNPC wants to enmesh Nigeria into a deeper financial mess by throwing $1.5bn (incl. debt) at a problem it created?” Founder of Stanbic IBTC Atedo Peterside said on his Twitter handle on March 28.

READ MORE HERE: https://www.icirnigeria.org/nnpc-gambles-1-5bn-on-financially-battered-port-harcourt-refinery/

Something wey no dey work dey loose that kain money, na only God know how e go loose when it start working