Refineries: Reps probe $396.33m spent by NNPC on turnaround maintenance in 4 years

The House of Representatives Thursday began the process of investigating the $396. 33 Million allegedly spent in four years on turn around maintenance of the Port-Harcourt, Warri and Kaduna refineries.

The House therefore called on the Federal Government to consider divesting a percentage of its shareholding in Port-Harcourt, Warri and Kaduna refineries to competent investors under transparent and fair bidding process.

It mandated the Committee on Petroleum Resources (Downstream) to conduct an investigative hearing on the processes of the “Turn Around Maintenance” (TAM) at the Port-Harcourt, Warri and Kaduna refineries by the Nigerian National Petroleum Corporation (NNPC) between 2013 to date and report back in eight (8) weeks for further legislative action.

These resolutions were reached during plenary sequel to a motion for: ‘Investigation of the $396. 33 Million Allegedly Spent in Four Years on Turn Around Maintenance of the Nation’s Three Refineries’ moved by Ifeanyi Momah(APGA, Anambara).

Presenting the motion, Momah said the House was aware that Nigeria has been living with the derogatory appellation of being a major oil producing nation that is heavily reliant on importation of refined petroleum products for its domestic consumption as a result of its low local refining capacity.

He said the House is also aware that Nigeria has three major refineries situated at Port- Harcourt, Warri and Kaduna, with installed capacity to refine 445,000 barrels of oil, enough for domestic consumption and export.

According to him, the House however notes that this objective has not been realized owing to a combination of factors, including corruption and inefficiency in the running of the refineries which regular “Turn Around Maintenances” have been mismanaged over the years.

Momah further said the House: “notes a report in This Day Newspaper of Friday October 18, 2019 by the Nigeria National Resource Charter (NNRC) on “Reducing Losses from Refineries Operations” which reviewed the operations of the Nigerian National Petroleum Corporation (NNPC) from a cost ‘perspective of efficiency and value for money.

“Further notes that the Nigeria National Resource Charter (NNRC) implements the Natural Resources Charter, (NRC) in Nigeria, which is a set of principles intended for use by Governments, Societies and the International Community to determine how best to manage natural resources wealth for the benefit of current and future generations of citizens.

“Observes the assertion by the NNRC in the report that the NNPC spent a whopping $396.33 million between 2013 and 2017 to carry out repair works under the “Turn Around Maintenance” (TAM) scheme on its three decrepit refineries at Port-Harcourt, Warri and Kaduna.

“Also observes the claim that the NNPC also spent N276.872 billion on operating expenses of the refineries between 2015 and 2018, as well as $36 billion on importation of petroleum products between 2013 and 2017.

“Informed that the three refineries contribute less than ten (10) percent annually to Nigeria’s Gross Domestic Product (GDP) and they are also among the league of refineries with the highest operating costs worldwide, as their consolidated capacity utilization dropped to 6.1 percent at the end of September, 2017”.

The lawmaker also stated that the House was Concerned that the strategic goal of establishing local refining facilities and its associated supply chain as a socio-economic game-changer that will result in national development has continued to elude the country’s oil and gas industry.

He added that the House: “further observes that going by the reckoning of the NNRC, the $36 billion the Country spent on importation of petroleum products in the last four years could have built four brand new refineries of similar capacity for the Country with the same 650,000 barrels per day processing capacity as the refinery that Dangote Group is currently building in Lagos State.

“Worried about the huge costs of undertaking the “Turn Around Maintenance” of the refineries, which, despite all the expenses, have remained comatose, leaving the Country dependent on importation of refined petroleum products for its domestic consumption at great expenses to the nation and national pride”.

The motion unanimously was endorsed when Deputy Speaker Ahmed Wase who presided over the House sitting put it to vote.

SOURCE: VanguardNews