…as US lauds rehabilitation project
By Nnamdi Ojiego
The Managing Director, Port Harcourt Refining Company, PHRC, Mr. Ahmed Dikko, is on course to end the protracted rot in the establishment and ensure it works at full capacity again.
This is even as the United States of America, USA, delegation expressed optimism about the rehabilitation of the refinery and opportunities for US private sector engagement.
The PHRC has witnessed rejuvenation in the last one year since the current MD took over the reins of the company. Before March 2020, the refinery was comatose and regarded as a waste of public resources because it has gulped billions and yet had not worked.
Due to the failure of successive administrations to do the needful, the company has failed to serve the purpose it was built. PHRC was made up of two refineries: the old refinery commissioned in 1965 with an initial installed capacity of 35,000bpd and later, “debottlenecked” to 60,000 bpd in 1972, and the new refinery commissioned in 1989 with an installed capacity of 150,000 bpd. It has a combined installed capacity of 210,000 bpd with five process areas.
Regrettably, the refinery’s effective capacity utilisation was reduced due to mechanical integrity failure of the capacity assets as a result of delayed Turn-Around Maintenance, TAM. Statutorily, TAM is to be carried out every other 24 months or 26 months. Unfortunately, the PHRC has undergone TAM only three times in 1992, 1994 and 2000 and a major maintenance intervention in 2015.
Efforts to carry out successive TAMs failed and were not successful due to several challenges. This long delay in conducting TAM has created a negative impact on the nation’s local refining capacity which includes loss of revenue, decrease in foreign exchange, increase in importation of refined petroleum products to meet domestic demand, and decrease in Gross Domestic Product, GDP.
To arrest this worrisome trend and reposition the company for greater productivity, a new managing director, Ahmed Dikko, was appointed in March 2020, alongside a new executive director of operations, Muazu Awaisu, and executive director of finance and accounts, Reginald Udeh.
Considering the level of decay at the refining company, many doubted the new MD’s capability and political will to turn things around for the better. However, his strides in the last 12 months have shown that he is on track to make the refinery refine again.
He had told this writer when he was newly appointed that he was not bothered about the way the company was run in the past as his primary assignment was quite clear: “superintending over the Phase 2 of the rehabilitation project. Whatever happened before now is past.
“The most important thing is that the administration of President Muhammadu Buhari has shown goodwill to fixing the refineries and for the first time in years, we are seeing progress in the rehabilitation project. I will achieve my vision for PHRC riding on the wings of the goodwill which the President himself has shown towards the rehabilitation. My job is simple because there is government’s goodwill”, Dikko had stated
One of the highlights of his one year in office was the signing of contract with Italy’s Maire Tecnimont for the rehabilitation of the PHRC. The $1.5 billion contract was signed by Dikko, and the vice president of Tecnimont, Sub-Saharan Africa, Davide Pellizola, respectively for NNPC and Tecnimont.
The signing was the latest indication that the repairs of 210,000 barrels per day refinery have taken off. The development is a significant milestone in the federal government’s efforts to restore the nation’s refineries to their optimum capacities.
The rehabilitation project will be done in three phases of 18, 24 and 44 months and would be funded from many components including the NNPC, Internally Generated Revenue, IGR, budgetary provisions, and Afreximbank. The project is expected to be completed in 2023.
Critics have queried what the government would achieve by injecting such a humongous amount of money into the rehabilitation project. For the purpose of clarity, there are quite a number of benefits in bringing the nation’s refineries back on stream. The project when completed, would ensure increased revenue and energy sufficiency in the nation and prevent unplanned shutdown as well as increasing GDP.
Other benefits will include local production of Aviation Turbine Kero and reduction in foreign exchange demand through reduced importation of petroleum products, satisfying local energy demand, strengthening the Naira by reducing the demand for Forex, and creating thousands of jobs across the value chain (crude supply, operating and maintaining the refinery, product supply etc) including several third-party contractors that will supply outsourced services or goods.
The refined products also will serve as feedstock for small-scale local manufacturing. The most significant and visible benefit is energy security for the country.
On how he was able to achieve so much within the short period he has been in office, Dikko admitted that progress so far recorded under his management couldn’t have been possible without the support and cooperation of staff.
“As I assumed duty, I met a highly enthusiastic and motivated workforce eager to contribute to the refinery rehabilitation project, phase 2. That was indeed gladdening. I applaud the doggedness and resilience of the staff upon the successful completion of Phase 1 of the rehabilitation alongside our external partners.
“From the security men, to plant operators, technicians, safety officers, and administrative staff, there’s a common vision; PHRC will be great again. We all believe that the story of the company is that of a child destined to succeed irrespective of circumstances, and collectively, we remain determined to excel
“Although we have suffered some milestone setback due to the COVID-19 pandemic, no time has been lost at all. We have spent the last few months strengthening our internal processes and procedures, and developing a framework to ensure continual improvement.
“The task ahead of us is daunting but under the transparent and inspiring leadership of Group Managing Director of NNPC, Mele Kyari, Minister of State for Petroleum Resources, Timipre Sylva and the goodwill of President Buhari, we are confident that we shall be able to bring this giant up and running for the benefit of all Nigerians”, Dikko assured.
To ensure adequate security of facilities, the PHRC henchman has put measures in place to ensure excellent working relationship and synergy of all security agencies and relevant stakeholders in the protection of the critical national asset. To his credit, there has never been any cases of economic sabotage such as pipeline vandalism, etc., since he took over the affairs of the company.
Moreover, the MD did not just concentrate on his immediate primary responsibility of getting the refinery in shape again, he has also ensure that the establishment enjoys a cordial relationship with host communities. This has paid off because, since he took over, there has never been an incidence of violent disagreement between the company and her hosts.
To reciprocate the hospitality extended by the people, PHRC has intensified Corporate Social Responsibility, CSR, activities toward meeting the needs of the people. For example, to cushion the effect of COVID-19 pandemic, PHRC, donated food relief items to the communities of Eleme and Okirika through the Joint Community Relations Committees, JCRC.
He has strategically reached and continued to reach out to relevant stakeholders to ensure he delivers his mandate without incumbrances.
As part of collaborative efforts to tackle the COVID-19 pandemic issue within the NNPC family , Dikko met with the Manager, Port Harcourt Medical zone, Area Manager of NPSC and the Manager Port Harcourt Zonal office where they agreed to work together and ensure compliance with directives.
Shortly after assuming office, Dikko led his team on a courtesy visit to the host governor, Nyesom Wike. The visit was to inform the Rivers governor about the strategic actions taken by the management to revitalise the Port Harcourt Refining Company.
“Today, I led my team on a courtesy visit to His Excellency, Governor Wike of Rivers State where we discussed and solicited the support of the state government on some key issues including encroachment on our pipeline right of way especially for the safety of lives.
“We also briefed His Excellency on where we were with the rehabilitation project and our projections going forward. The governor commended the ongoing efforts and cited the economic importance of PHRC to the state and the Nation at large.”
The MD has also played host to the National Assembly Joint Committee on Petroleum, led by Sen. Sabo Nakudu and Co-chair, Hon. Mohammed Monguno who visited PHRC as part of NASS efforts to develop a proper framework for the downstream sector in the PIB.
“After brief presentations on the current efforts being made with the planned rehabilitation project and a plant tour of the facility, we received assurances of the NASS support to the rehabilitation of PHRC.”
Meanwhile, the United States Consulate in Nigeria has commended President Muhammadu Buhari’s administration for the approval of PHRC’s rehabilitation project, and commitment and efforts of the managing director, Ahmed Dikko, to make the company work again.
The delegation led by Deputy Political and Economic Chief, Merrica Heaton, made the commendation when it visited PHRC to discuss possible avenues of partnership with the company.
“Great to meet with PHRC MD Dikko and his team. We enjoyed learning about the rehabilitation plans and opportunities for U.S. private sector engagement”, Heaton said.