Presidency said plans have been concluded to privatise Nigeria’s government-owned refineries in Port Harcourt, Warri and Kaduna.
Special Adviser, media and public communications to President Bola Tinubu, Sunday Dare, disclosed the privatisation plan in a reforms tracker posted on his X handle.
He stated that “Full privatisation of Port Harcourt, Warri, Kaduna refining is in the works.
Local oil refining and production to peak steadily with Dangote and modular refineries active.
With full local refining capacity gradually being met, days of fuel queues to end.”
Let’s use PIA as guide – Prof Iledare
Reacting, Prof. Wumi Iledare, a Professor Emeritus in Petroleum Economics and Policy Research, said: “The Petroleum Industry Act, PIA 2021 is really the place to go on this issue. What is the essence of the law when it is blatantly not followed?
“The Federal Government has the right to express an opinion but ultimately, it is the Nigerian National Petroleum Company Limited, NNPCL Board prerogative to decide what to do with NNPCL assets. That is why the Board has a Chairman, who is not the Minister of Petroleum.
“On whether or not the move was the best option, he said, “The Board of Directors of NNPCL, not the government has the options. NNPCL is held in trust for the Federation by Ministry of Finance Incorporated; MoFI 50 per cent and 50 per cent owned by MoPI, NNPCL Board calls the shot.
“The capacity of the buyers to maintain and operate the refineries is very important. However, let the PIA 2021 provisions guide decision making in the oil and gas sector.”
Privatisation to yield better results — 11Plc
On his part, the Managing Director, 11Plc, Mr Tunji Oyebanji, “The development is a good one as I will say it is better. This will lead to better results than what we had in the last 10 years. My advice is that it will be sold to competent and people who know what they are doing.
“However, there are not so many people looking into refining because it is a difficult business.
“I strongly believe there are no other better options because government does not have the strength to handle the refineries as you can see the NNPCL currently struggling to keep up.”
Private firms structured to win – CPPE
Also, Chief Executive Officer of the Center for the Promotion of Private Enterprise CPPE, Dr. Muda Yusuf, said: “The reality is that a public sector organization or institution is not structured to be able to manage such a strategic enterprise as a refinery.
“The management and ownership model needs to change. We can adopt the LNG model where we have a majority shareholder maybe holding 52 or 60 that have the technical and financial capacity to manage the refinery. The government can hold the balance of the shares.”
We’ll only accept NNLG model if… – PENGASSAN
Reacting, the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, faulted the government haste to privatize the public refineries going by the experiences of the privatization exercise.
Speaking through its General Secretary, Lumumba Okugbawa, said “One of our main points of activism as an Association, is the issue of local refining of our crude oil production. Then challenges like pipelines vandalism, crude oil theft, refusal to carry out Turn Around Maintenance, TAM, as and when due, non- replacement of departed staff, self interest, smuggling and many more, reared their ugly heads. This led to importation of refined products which became a cash cow for some privileged Nigerians.
“Our preference will be that of the NLNG model, where the investors would have 51 per cent while the Government would have 49 per cent shares. We are not opposed to change of ownership but a preferred NLNG model for them.”
Earlier in August, PENGASSAN in a communiqué at the end of a three-day conference on Oil and Gas titled PENGASSAN Energy and Labour submit (PEALS), among others said “The Summit agreed that there is a need to support local refineries to achieve additional values in a way to spur economic growth, healthy competition and energy security in line with the provisions of the Petroleum Industry Act (PIA).
The Summit opined that efficient management of the downstream supply chain is critical for Nigeria’s economic growth and energy security by leveraging technology, enhanced collaboration, and building a resilient and sustainable supply chain.
“In this vein, the Summit reiterated its earlier call for the adoption of the NLNG model of Public, Private Partnership (PPP) between the Federal Government and private investors in the ratio of 49:51 respectively to put the refineries on the right track.
The Summit also called on the Federal Government to develop and strengthen the country’s value chain to ensure a more efficient and reliable distribution system without which the country would continue to face recurring fuel shortages as its reliance on a truck-based distribution system is deficient and inadequate to meet the demands of Nigerian given its vulnerability and disruptions due to bad roads, flooding and ad-hoc logistics arrangements.”
Four refineries
The nation’s two refineries in Port Harcourt, Rivers State, which combine to form the Port Harcourt Refining Company (PHRC), have an installed capacity of 210,000 barrels per day (bpd).
While the Kaduna Refining and Petrochemical Company Limited (KRPC) has an installed capacity of 110,000 bpd; the Warri Refining and Petrochemical Company Limited (WRPC) has an installed capacity of 125,000 bpd.
Earlier, the NNPCL said it was seeking private companies to operate and maintain two of its refineries.
The NNPC Ltd in an invitation for Expressions of Interest posted on its X handle said it was seeking to engage reputable and credible operations & maintenance companies to operate and maintain the Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC).
