…$300m required —Kachikwu
…Concessioning of P-H refinery, an illegality —BPE
By Henry Umoru
ABUJA— The federal Government, Senate and other stakeholders in the oil sector agreed, yesterday, to fix the nation’s refineries, rather than concessioning.

The decision came at the public hearing organised by Senate Adhoc Committee on Planned Concession of Port Harcourt Refinery, led by Senator Abukakar Kyari (APC, Borno North).

Ibe Kachukwu and Wale Tinubu

Minister of Petroleum Resources, Dr. Ibe Kachikwu, who denied knowledge of plans to concession the Port Harcourt refinery, said a technical committee set up by the government to undertake a review  of repair of the nation’s refineries was coming up with a holistic investment figure to fix the refineries, even as he denied making all remarks credited to him on alleged planned concession as reported by some dailies.

The minister, however, reiterated that there was no plan to concession, privatise or sell the refinery, for which an estimated $300 million would be required for repairs.

Speaking further on the state of the refinery, Kachikwu, who noted that $300 million would be required to repair it, said it was better to engage the company that built the refinery, in the first instance, for its repairs, due to the availability of spare parts and knowledge of the configuration.

He added that the country’s refineries were being run and maintained by Nigerian engineers, and acknowledged that there was the urgent need for constant retraining of the engineers.

After accusation and counter-accusation between the Senate and federal agencies handling the nation’s oil refineries on alleged move to concession the Port Harcourt Refinery, yesterday, both parties settled for revamping, rehabilitation and maintenance of the refinery along with others through what they termed, sourced financing from private oil firms.

According to the Senate and the Federal Government, the move to revamp the Port Harcourt refinery has become imperative.

At the public hearing, the committee failed to extract facts from the various Federal Government agencies concerned to that effect as the office of the Secretary to the Government of the Federation;Minister of State for Petroleum Resources, Mr Ibe Kachikwu; Group Managing Director of Nigerian National Petroleum Corporation, NNPC, Dr Maikanti Baru, and others, denied any move to that effect .

Also in his presentation, the Director- General, Bureau of Public Enterprises, BPE, Alex Okoh, said that concessioning of the refinery would be an illegality.

Specifically the Petroleum Minister in his submission, explained that the alleged planned concession story on the refinery must have emanated from concerted efforts being made by his Ministry and NNPC on new arrangement of revamping all the refineries and not that of Port Harcourt alone.

Kachikwu also faulted publications quoting him as speaking about a plan to concession the refinery, even as he denied making any statements that indicated that the government would privatize or sell the Port Harcourt refinery, or other state owned refineries.

According to him, what is in the pipeline for all the refineries by government, was an arrangement where private investors would bring in money for their repairs to optimal capacities which will bring about expected incremental  volume in their  production  where their money would be recouped, adding, “The planned arrangement is the only viable alternative for the federal government as far as repair work on the refineries are concerned since the turn around maintenance carried out over the years has failed.”

Speaking further, Kachukwu who noted that as the driver of the policy of the petroleum industry, there had not been any approval from anybody or President Muhammadu Buhari to concession the refinery, said, “I am worried that after about forty years of oil production in this country when I assumed office, NNPC was producing below 10 percent. We have made it up to 30 percent performance and this is still where we are today.

“The issue for the turnaround maintenance was that government was not going to put more money into the process of turnaround maintenance but we were going to seek private funding to achieve that objective, my position is that there was no concession.

“I have not given any policy to NNPC or directive for them to concession or to sell. I have conveyed the President’s approval for them to get financing and repair the refinery and bring it to template. That is the policy directive, that is what they are working on.”

According to him, his work was a policy work and that he was not the one running the refineries, adding, “The idea is for Nigerians to maintain these refineries and that must be uppermost.”

Senate’s investigation was instigated by newspapers reports where Tinubu was allegedly quoted as saying the company had secured approval for the concession of the refinery.

Tinubu, while speaking at the Nigerian Stock Exchange in Lagos on May 11,2017 had disclosed that his company entered into a Memorandum of Understanding, MoU MoU with the Federal Government, to manage the refinery under a repair, operate and maintain arrangement, adding, “We also got approval from the President to repair, operate and maintain the Port Harcourt refinery together with our partner, Agip. We plan to increase the refinery’s capacity from 30 per cent to 100 per cent, subsequently to 120 per cent.”

In his submission at the public hearing, Group Chief Executive of Oando PLC Mr Wale Tinubu said that there was “no concession, no privatisation and no sale of any assets. All that is happening is that responsible corporate bodies, responsible individuals and government were trying to find a solution to the perennial disgrace of exporting our crude and importing petroleum products. It is only there countries in the world that import petroleum products; Iran, Iraq and Nigeria.

“Nigeria exports copious amount of crude and still import petroleum products. This a national disgrace that we need to find solutions as quickly as possible.”

Tinubu however, enjoined all stakeholders to collaborate effectively to finding solutions by the private channels in fixing the existing refineries in the country, just as he said that Oando has been categorical investors investing in infrastructure in the country, adding, “Oando has a history as an indigenous company of building local capacity and developing assets across the country.”

Also in his presentation, the Director- General, Bureau of Public Enterprises, BPE, Alex Okoh said that concessioning of the refinery would be an illegality.

Also in its position paper, the Nigeria  Union of Petroleum and Natural Gas Workers, NUPENG and PENGASSAN kicked against the move to concession the refinery, describing both Oando and Agip as anti- Union.

The chairman of the committee, Senator Abubakar Kyari in his remarks, said that by whatever name called,  facts emerged at the session that the arrangements being made for the repair of the refineries were  not open to all stakeholders in the oil industry and not in line with the laid down procedure.

He therefore  admonished the Minister and other policy makers in the industry to ensure that the planned arrangement for revamping, rehabilitation and maintenance of refineries  should followed due process in line with extant laws.

After the deliberations, the chairman said, ” we have achieved a lot. Henceforth all processes whether its revamping or concession, will be done in accordance with the extant laws and in accordance with due process and it will be transparent.

“It will be in an accountable manner in line with this present administration’s change agenda. We are asking the executive to follow those laws and the policies and make it transparent and accountable.”

According to Kyari, NNPC did not commit any illegality, what they did is that they did not follow the right steps.

Earlier in his opening remarks at the public hearing, the senate President, Bukola Saraki urged the committee to leave no stone unturned to get to the root of the matter without fear or favour, saying it is important to do things in the right manner in order not to send wrong signals to investors and international development partners.