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Nigerian National Petroleum Corporation (NNPC) on Tuesday submitted financial records of expenses worth $396.33 million on turn around maintenance (TAM) of the four refineries between 1998 and 2008.
The record submitted to the Ad-hoc Committee investigating the status of the nations four refineries, the Turn Around Maintenance (TAM) to date and regular modular licensed refineries’, chaired by Mohammed Datti (APC-Kaduna), however did not include the TAM carried out during the last administration.
Breakdown of the amount spent on the each refineries within the period, showed that out of total sum of $182.730 million proposed for old and new Port Harcourt refineries, the sum of $157.641 million was spent; out of total sum of $151.170 million proposed for Warri refinery, while out of the sum of $91.5 million proposed for $87.517 million was spent.
Meanwhile, oil workers under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) proposed two models of refinery management in order to end the perennial challenges facing the four refineries.
While stressing that the four refineries are “running on a faulty business model,’ the Association observed that ” solving the TAM is a short term solution, thus the need to have a holistic solution that is long teem and sustainable.”
According to Olabode Johnson, PENGASSAN President, some of the challenges bedeviling the refineries include: lack of operational autonomy, unnecessary bureaucracy, unsteady crude oil supply, delay in evacuation of refined products leading to shut down of refineries as well as ageing manpower leading to knowledge gap.
Johnson who was represented by Timothy Jayeoba, member of the PENGASSAN Central Board, stressed the need for adoption of public private partnership (PPP) as well as NNPC’s financing model up to 10 years.
On the status of the four refineries, Johnson who quoted the NNPC’s data, stated that the average functional utilization of the refineries as at 2017 was 20 percent.
He also proposed government ownership of 100% equity alongside private sector handling the operation and maintenance.
He however recommended the adoption of functional models operational in South Korea, Cote d’Ivoire, South Africa, Indonesia.
While noting that the age of the refineries do not have to do with its functionality, Johnson blames NNPC for failing to conduct and adhere to the two year turn around maintenance.
According to him, in Malaysia, Saudi Aramco and Petronas have formed two joint ventures in operations of the refinery and petrochemical integrated development (RAPID) project now under construction at the $27-$28 billion.
Also, India and Saudi Arabia are to build $44 billion refinery in Western India.
“World refinery capacity expanded by 0.45mb/CD to stand at 97.37mb/CD at the end of 2016, mainly supported by additions in North America and the Middle East, as well as Asia and Pacific regions. In the Middle East, expansions came from OPEC members, while the United States, China and South Korea accounted for additions in North America, Asia and Pacific. 2016 refinery capacity in the OECD grew for the second consecutive year, mainly due to gains in the United States. Global refinery throughput ramped up by 1.7 percent to reach 81.94mb/d in 2016 with largest gains in Asia and Pacific and the Middle East.
“In the Middle East, the gains in refinery throughput originated in OPEC member countries. India, Chima, South Korea dominated the gains in the Asia and Pacific region,” he told the Committee.
Speaking earlier, Anibo Kraga, Chief Operating Officer for Refineries who represented NNPC disclosed that Federal Government is responsible for subsidy payment not the Corporation.
In his intervention, Wole Oke, member of the Committee blamed the Parliament for failing to sharpen Executive policies, just as he commended PENGASSAN leadeehio for a well packaged and informative presentation.
On his part, Ibrahim Isiaka, member of the Committee alleged that most public officers responsible for the management of public resources “try to defend their failures.”
While ruling, Mohammed Datti, chairman of the Ad-hoc Committee directed NNPC to submit certificate of completion of various contracts awarded, 5-year audited account of the four refineries with the view to ascertain compliance with the Public Procurement Act, 2007.
While frowning at the argument of the Corporation that there was no money for the turn around maintenance of the refineries, Datti wondered where the Corporation sourced the money for payment of subsidy to the tune of trillions of naira.
To this end, he gave the Corporation one week ultimatum to comply and revert back to the Committee.
KEHINDE AKINTOLA, Abuja
