By Henry Umoru

The Senate, last Tuesday, put a halt to and has simultaneously began a probe of all the processes of the proposed rehabilitation and operation under a concession arrangement of the 210,000 barrels per day (bpd) Port Harcourt Refinery by oil firms – Nigeria Agip Oil Company (NAOC) and Oando Plc – citing lack of openness and transparency.

The Senate, on the same day, also set up a seven-member Ad-hoc Committee to carry out a holistic investigation to determine how and why such a deal was sealed and the criteria used to select Agip/ENI and Oando Plc, to maintain and operate the Port Harcourt Refinery, and at what cost and timeframe.

The Ad- hoc Committee, which has Senator Abubakar Kyari, APC, Borno North, as Chairman, has Senator Benjamin Uwajumogwu, APC, Imo North, as Vice Chairman, while Senators Dino Melaye, APC, Kogi West; Duro Faseyi, PDP, Ekiti North;  Sabo Mohammed, APC, Jigawa South; Abdul’ Azeez, APC, Adamawa Central, and Matthew Urhoghide, PDP, Edo, Edo South, are members.

Senate chamber

The resolution of the Senate was sequel to a motion by Senator Sabo Mohammed, APC, Jigawa South titled, “Non-transparent transactions relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources.”

Though Senator Sabo Mohammed had proposed one resolution that an Ad- hoc Committee be set up to investigate the process, there was, however, an additional prayer by Senator Atai Aidoko, PDP, Kogi East, that all processes of concession of the Refinery should be put on hold until the Committee submits its report and it was immediately taken as an overriding resolution of the Senate.

Ruling on the motion which received the overwhelming support of members through voice vote, Senate President Bukola Saraki, constituted the ad hoc committee to carry out the investigation on the alleged fraud rocking the concession.

Trouble may have started with the entire process following the alleged refusal of the government to carry along the Bureau of Public Enterprises (BPE) which ought to be in the main stream of the entire concession arrangement.

It was gathered that inspite of  BPE’s listing of the refinery along with Warri and Kaduna refineries on its privatisation schedule, the agency was however not involved in the plans by the federal government to concession the Port Harcourt refinery.

Apart from the BPE, which is said to be in the dark in the arrangement, the National Council on Privatisation (NCP), which is statutorily responsible for signing off on the privatisation and concession of such national assets, has not been constituted by the government.

According to the BPE, privatisation of refineries, chronicle of events, obtained by Sunday Vanguard, the PHRC transaction process effectively commenced in March 2004, when four bidders were involved but the process was suspended mid way, before it was re-opned again in December 2006. The deadline for submission of EOIs was January 19, 2007.”

BPE further stated that six bids were received from the following prospective investors: Mittal Investments Limited, Indorama International Finance Limited, Global Oil and Energy, LinkGlobal International Limited, Taleveras Group and Oil Works Limited (DFP Project Finance Limited).

BPE explained that “following evaluation of new Expression of Interests, EOI, approval was granted for prequalification of eight consortia. The firms recommended to proceed to the next stage included Essar Infrastructure of India, Oando Plc, Refinee Petroplus and Bluestar Oil Services Limited Consortium. Others included Mittal Investments Limited, Indorama International Finance Limited, LinkGlobal International Limited and Global Oil and Energy.

“BNP Paribas was engaged to conduct fresh valuation of the refineries.”

BPE noted that at the financial bid opening, Bluestar Oil Services Limited Consortium emerged the preferred bidder with a bid of $561 million. Other bidders were disqualified for breaching bidding rules. Refinee Petroplus was said to not to have presented the bank draft for 50 percent of their bid, while the bank draft (allegedly) provided by Oando Plc did not sum up to the 50 percent of their bid price as required in the bidding rules.

“NCP”, BPE then concluded, “subsequently approved Bluestar Oil Services as the core investor in PHRC. Bluestar completed payment for the full amount of their bid price of $561 million on Friday May 25, 2007, and share certificate for PHRC was handed over to Bluestar Oil Services Limited on May 28, 2007,” BPE added.

Though the refinery was handed down over to Bluestar a day before former President Olusegun Obasanjo handed over power to late President Umar Yar’ Adua, the latter cancelled the privatisation exercise done for all the refineries. Prior to that, the Petroleum and Natural Gas Senior Staff Association, PENGASSAN and Petroleum and the National Union of Petroleum and Natural Gas workers, NUPENG, had protested that sale of the nation’s refineries.

But according to Oando, it “shares the vision of the Nigerian Government to become a petroleum product self-sufficient country in the short to medium term and ultimately be a net exporter of such products.

“Accordingly, pursuant to the Memorandum of Understanding (MOU) reached by the Federal Government and NAOC/ENI, Oando will partner with NAOC/ENI in the proposed rehabilitation of the Port Harcourt refinery (PHRC). This will be based on a repair, operate and maintain (ROM) agreement which will see PHRC’s capacity grow from its current 30 percent to 100 percent, its main capacity of 210,000 BPSD.”

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