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REPS URGE GOVT TO OUTSOURCE REFINERIES TO IOCS


Tony Akowe, Abuja
 * 
 * 
 * 

June 7, 2023
 * Want licences of 37 inactive refineries revoked

The House of Representatives yesterday urged the Federal Government and Nigerian
National Petroleum Corporation Limited (NNPCL) to outsource the operations and
maintenance of the nation’s refineries to reputable International Oil Companies
(IOCs) to guarantee reliability, optimal operational availability and maximise
value.



The House asked the government to revoke the 37 non-active refining licences
issued to private investors.

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The House said, in the alternative, the government should ensure the activation
of the inactive licences approved and issued to private refineries for maximum
operations and competition in order to eliminate the possibility of a monopoly
in the downstream sector.



This is part of the recommendations of the Adhoc Committee on the State of
Refineries set up by the House to ascertain the actual cost of rehabilitating
the refineries, which was adopted at plenary by the House.



The lawmakers asked NNPCL take full advantage of the Petroleum Industry Act 2021
passed by the National Assembly to fast-track the ongoing rehabilitation of the
refineries empowered by the legislative intent for a deregulated business
environment and restore the refineries to minimum of 90per cent capacity
utilisation.

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The House directed that the Port Harcourt Refinery Phases One and Two
rehabilitation should be completed on schedule to inject about 54,000 barrel and
135,000 barrel per day of refined product into the economy.



The House said the two refineries should pump a combined 189,000 barrel of
refined products daily by the end of the year.



Also, it said work on the Warri Refinery should be completed on schedule to pump
about 75 ppp barrel of petroleum products per day with effect from September.

The House added: “The 10th National Assembly be mandated to carry out
legislative oversight on the ongoing rehabilitation to ensure that the nation
achieves the expected processing capacity of 189,000 Barrels Per Day from the
PHRC (54,000BSPD from OPHR+135,000BSPD from NPHR) and 75,000BSPD from WRPC plus
whatever  processing capacity from the Dangote Refinery, to meet the domestic
needs for petroleum products by December.’’

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“The 10th National Assembly should be further mandated to ensure continuous
legislative oversight of the ongoing rehabilitation programme by the NNPCL at
the Port Harcourt, Warri and Kaduna refineries in order to achieve project
target timelines and rehabilitation of the refineries to bring them back to
maximum refining capacity.



The House wants the NNPCL to immediately award contract for the rehabilitation
of the Kaduna Refinery and Petrochemical Company (KRPC), while striving to
achieve the 3-4-year standard regular Turn Around Maintenance (TAM) global best
practice for the Refineries after the full and complete rehabilitation to ensure
sustainable refinery operations and value maximization.

The House also asked the Federal Government and the NNPCL to upgrade the
pipelines security architecture for maximum surveillance, protection and
pipeline security to avoid incessant pipeline vandalism, ensure regular and
continued crude oil feedstock supply to the refineries when fully rehabilitated
and functional.



They want an end to the DSDP (Direct Supply-Direct Purchase) arrangement,
removal of subsidy on Petroleum Motor Spirit (PMS), deregulate prices on the
product to ensure competitiveness and provide adequate palliative measures to
reduce anticipated economic impact and hardship on Nigerians and the economy.

The House said NNPCL should take responsibility for the continued failed
assurances for the commencement of operations and coming on-stream of the Port
Harcourt Refinery and the failure of the Contractor (Tecnimont SPA of Italy) to
deliver on the contract terms and project target timelines.

The House wants the Contractor handling the rehabilitation of the Port Harcourt
Refinery, Tecnimont SPA of Italy be reprimanded for the failure to deliver on
the terms of contract agreement, demonstrating lack of capacity to achieve
expected project target timelines, and continuous shifting the expected
operational dates from December 2022 to March 2023; from March 2023 to the
Second Quarter of 2023 and from Second Quarter of 2023 to now September 2023.

It asked for a forensic audit of all the rehabilitation projects in the three
(3) refineries be further conducted as obvious omissions were noted in the
submissions made by the NNPC, seeming duplication of projects observed and
possible double payments made.

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