A former Vice President of Nigeria, Atiku Abubakar, has said the Nigerian National Petroleum Company Limited, NNPCL, should have sold the Port Harcourt refinery to avoid debt.
Atiku was reacting to the decision of NNPCL to hand over the Port Harcourt refinery to a private firm to operate and maintain.
He noted that the country’s oil firm must explain to Nigerians what they stand to gain by handing over the refinery to a private firm.
Posting on X, the former Vice President lamented that all his suggestions fell on deaf ears.
He wrote: “I have always advocated for far-reaching reforms to reposition Nigeria’s oil sector and, indeed, other sectors of our economy. In particular, I had consistently called on the Buhari administration to break its monopoly in all infrastructure sectors, including the refineries, and give investors, both foreign and domestic, a larger role in funding and management.
“My position has been well laid out in The Atiku Plan (2018) and My Covenant With Nigerians (2022). But our suggestions fell on deaf ears. First, they refused to privatize the refineries. They left them idle for years while paying humongous staff salaries.
“Then, they contracted a loan of US$1.5 billion for rehabilitation. Now, the current administration wants to turn the rehabilitated refinery to private concerns for operation and maintenance!
“Without prejudice to the terms of the agreement between the NNPC and the private operators, it would undoubtedly have been better if the NNPC had sold the refinery, pre-rehabilitation, to avoid the burden of debt.
“The @nnpclimited must explain to the satisfaction of Nigerians what benefits its newly discovered approach to privatisation will confer on Nigeria and Nigerians. -AA”
The NNPCL, had on Tuesday, 16th January, called for Expression of Interest, EOI, from qualified oil and gas firms to operate and maintain the Port Harcourt refinery.
In a public notice, NNPCL said the process would help improve dependability and sustain Nigeria’s fuel supply and energy security requirements.
The country’s oil company said the “operate & maintain” model was “one of the key requirements by the lender” for the Port Harcourt project.
According to NNPCL public notice: “The Nigerian National Petroleum Company (NNPC) Limited is seeking to engage reputable and credible Operations & Maintenance (O&M) companies to operate and maintain one of its refineries, Port Harcourt Refining Company (PHRC), to ensure reliability and sustainability towards meeting the nation’s fuel supply and energy security obligations.”
In December 2023, NNPCL announced the “mechanical completion” of the 60,000 bpd part of the 210,000-capacity plant, after several years of abandonment. The refinery is expected to begin to have its products in the market anytime from the end of this month.
In 2021, NNPCL Group Chief Executive Officer, Mele Kyari, said the Federal Government was considering a plan to become a minority shareholder in the beleaguered oil refineries.
That was after the Federal Executive Council, FEC, signed off on a $1.5 billion rehabilitation plan, funded largely by Afrexim Bank as well as from Internally Generated Revenue, IGR, by NNPC, for the Port Harcourt refining complex, which has a capacity of 210,000 barrels per day.
In the public notice Monday, among others, NNPCL stated that any company applying to operate and maintain the plant must present its audited accounts between 2019 and 2022 as well as demonstrate a minimum average annual turnover of $2 billion between 2019 and 2022.
The Port Harcourt refinery rehabilitation project, which cost about $1.5 billion, covers engineering, procurement, construction, installation, and commissioning phases.
