The Nigerian National Petroleum Corporation (NNPC) has said that Nigeria’s four refineries in Port Harcourt, Warri, and Kaduna, were deliberately shut down, having been starved of the mandatory routine turnaround maintenance and major rehabilitation, despite the huge chunk of money voted for them over the years.
The Group Managing Director of the NNPC, Mallam Mele Kyari said the Corporation used the opportunity to carry out a detailed audit of the ailing refineries and to mobilize funds and technical resources to restore them to full operating capacity within the shortest possible time.
Kyari said putting the refineries back to shape is part of a strategic effort to crash fuel prices and guarantee energy security.1
Global records show that Nigeria is about the only major oil-reliant country without local refining capabilities.
But this scathing development has consistently drained its lean foreign reserves through scandalous deals that entail exporting premium crude oil and importing low-grade refined products in return, and oil swap deals.
Kyari assured yesterday in Abuja that all the four refineries are set for major rehabilitation. The four refineries have a combined capacity of 444,000 barrels per day.
“What you call rehabilitation is different from turnaround maintenance (TAM). TAM is a routine endeavour.
“When you talk about rehabilitation, that means you have colossal loss of capacity in the refineries.
“It means you have not done TAM properly, you’ve not replaced parts as and when due and it has gotten to a point where you’re not able to operate the refineries in the full installed capacities.
“Every refinery is expected to operate at least 90% of installed capacity. With all the TAM down, it was impossible to run any of these refineries at 90% capacity.
“Our estimate was that we could run at 60% capacity but if we do that, it’s simply value destruction. You take a $100 crude and bring out $70 product, it doesn’t make sense.
“We want to make them work and that’s why we’re doing full rehabilitation. Refineries are like aircraft. I have visited refineries that are over 100 years old that are still still functioning. Refineries don’t die like cars or other assets”, he explained.
He explained that the NNPC is looking inwards and leveraging on local competence by appointing its engineering subsidiary, National Engineering and Technical Company, NETCO/KBR as Owners Engineer (OE) for the Port Harcourt and Warri refineries in May.
This would save cost and hefty consultancy fees, in the programme to rehabilitate refineries, the group MD said
By Chibisi Ohakah, Abuja