Refineries’ rehab costs N100b, a waste amid huge oil import bill
By Jeph Ajobaju, Chief Copy Editor
Muhammadu Buhari as both President and Oil Minister wasted N100 billion on rehabilitating Nigeria’s four refineries in 2021 without any of them producing a single litre of refined oil: meaning they are conduits for cronies to milk the treasury.
This has gone on for years, before he won Aso Rock, but escalated since he became President and planted Northerners in all the key posts in the Nigerian National Petroleum Company (NNPC), even as crude oil is domiciled in the South.
Federal lawmakers too are in on the act, stealing from the treasury since the Olusegun Obasanjo years by voting billions of naira every year to amend the Constitution, which they fail to do.
Successive federal administrations refuse to do the best thing, which is privatising the refineries, because they provide avenues for turn around maintenance (TAM) contracts in inflated sums shared by Abuja officials.
The NNPC disclosed in its latest report that it spent N100 billion to maintain the refineries in 2021 and that funds were pumped into revamping them monthly.
The report of its funding from January to December 2021 did not name the refineries but it is public knowledge that the four national refineries are under the management of the NNPC, with the rehabilitation of Port Harcourt Refinery ongoing.
The others are Kaduna Refinery, Warri Refinery, and a second one in Port Harcourt.
The funding performance report said N8.33 billion was spent each month for 12 months from January to December 2021 to rehabilitate the refineries.
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Rehabilitation budget
The PUNCH reports that Abuja has processed $98 million and N17.2 billion as part payments for the rehabilitation of the Port Harcourt Refinery.
The newspaper quoted the document of the NNPC as saying that $194 million has been paid to Tecnimont SpA of Italy as 15 per cent advance payment for the job.
This is contained in the financial status update of the rehabilitation of Port Harcourt Refinery being financed by an equity contribution by AfreximBank, the sponsor and loan lender.
The document shows that the Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) contract price remains at $1.397 billion lump sum with $162 million as provisional sum.
That brings the total cost to $1.559 billion, as approved by the Federal Executive Council (FEC) on 17 March 2021.
The FEC approved the award of the EPCIC contract to Tecnimont and the contract agreement was signed on 6 April 2021, according to the report of the NNPC.
FEC approval for Warri and Kaduna Refineries
The FEC approved $1.48 billion for the rehabilitation of both Warri and Kaduna Refineries, as announced in August 2021 by Petroleum Resources Minister of State Timipre Sylva after a FEC meetings in Abuja.
Sylva said rehabilitation of the two refineries would be awarded to Messers Saipem SPA and Saipem Contracting Limited at $1.484 billion and would be done in three phases of 21, 23, and 33 months.
