NNPC Engages Original Builders to Revamp Refineries

• NNPC Engages Original Builders to Revamp Refineries

The Nigerian National Petroleum Corporation said it had engaged the original builders of the refineries in Port Harcourt, Warri and Kaduna, in a bid to return them to at least 90 per cent capacity utilisation before the end of 2019.

Nigeria has four refineries with an installed capacity of 445,000 barrels per day, but they have continued to operate far below the installed capacity for many years.

The corporation, in its quarterly publication for the fourth quarter of 2017, obtained by our correspondent, said it was working in tandem with the Ministry of Petroleum Resources and other stakeholders to implant a novel refining model and other strategies that would restore the refineries and expand existing capacities to record levels.

The reform, according to the NNPC, also seeks to entrench a self-sustaining financial model with near zero reliance on the Federal Government funds.

The publication noted that the Group Managing Director, NNPC, Dr. Maikanti Baru, recently inaugurated eight committees charged with the express directive to return the refineries to their nameplate capacities by 2019.

It said, “To encourage seamless work flow and underscore the crucial nature of the task ahead, the committees are headed by a steering committee, chaired by the GMD. Other committees are: rehabilitation, stakeholder management, financing, legal, procurement, pipeline and crude oil supply and security as well as staffing and succession planning.

“For a start, the corporation has gone back to the original refineries’ builders, which are the JGC Corporation of Japan for Port Harcourt Refinery, Italy-based Snamprogetti, for Warri Refinery and Japan-based Chyoda, for Kaduna Refinery.”

The Chief Operating Officer in charge of the refineries and petrochemicals autonomous business unit, NNPC, Mr. Anibor Kragha, was quoted as saying that the original builders had actually started conducting studies to determine the cost of fixing the plants and returning them to minimum capacity utilisation of 90 per cent.

He said once the final coating was achieved, the corporation would move in swiftly to perfect the proposed funding option and execute the upgrade of the plants within a 24-month window ahead of the 2019 deadline of the Federal Government for zero fuel import.

According to the corporation, already, about 30 would-be financiers have submitted expressions of interest after a widely publicised bid.

It said an inter-ministerial committee, including the NNPC, ministries of Finance and Petroleum Resources, the Department of Petroleum Resources and the Bureau of Public Enterprises, was currently working round the clock to evaluate the bidders.

“In principle, the new financing preference is engineered to feast on the funds provided by the financiers to upgrade the refineries and still make some money, no matter how marginal, which would be an improvement as the refineries are currently not making any,” the publication stated.

The Group Executive Director and Senior Technical Adviser to the Minister of State for Petroleum Resources on Refineries and Downstream Infrastructure, Mr. Rabiu Suleiman, said, “What the model seeks to achieve is to bring in investors who are ready to bring their money and get compensated in due course without government or the NNPC bringing its own resources.”