A Review of the Nigerian Energy Industry

Senate express sadness over state of Kaduna Refinery

27 January 2012, Sweetcrude, KADUNA – The Nigerian Senate Committee on Petroleum (Downstream) has expressed worry that the Kaduna refinery built to refine 110,000 barrels of crude oil per to meet part of the nation’s fuel demand has diverted its operations to producing drums.

Senator Magnus Abe, chairman of the committee, expressed the worry when the committee visited the plant on oversight function, lamenting that the plant established over 20 years ago is unable to refine even 30,000 barrels of crude oil per day.

But more worrisome to him is that the company, rather than focus on its core business of refining petroleum products, “has resorted to producing of drums for oil companies due to decay in its infrastructure.”

He said after a tour of the plant: “We are not happy with the situation in this refinery. It is shocking that the refinery built over 20 years ago with a capacity of 110,000 barrels is operating at low capacity.

“One appalling thing is that a plant built for refining products is converted to a container-making firm. We are doing this when we are paying N12 billion annually as staff salaries. We are going to find out why you are importing crude. It is not that the plant is not working, but there is no immediate plan to revive it,”

Senator Abe continued: “It is more annoying if you consider the investment on the refinery. 110,000 barrels at 90 per cent capacity, we could be making more than N719 billion annually. The country would have been able to tackle the problem of infrastructure that we are talking about today.

“Instead of turnover of over N700 billion, we are battling with obsolete equipment. We are shocked by the obsolete facilities that we have seen here, particularly in the control room. The Nigerian people expect more from this plant.”

The committee chairman, who equally expressed dismay that the Kaduna refinery collects crude oil from the Pipelines and Product Marketing Company (PPMC) without proper costing, directed the management of the company to forward to the Senate the original cost of building the plant, the jobs that the plant has done, and the staff audit.

Bolanle Ayodele, managing director, has earlier expressed appreciation over the visit of the committee and the hope that help could come to the plant to enable it begin to function at its optimal level.

According to him, the plant found itself in its current deplorable state due to lack of adequate Turn Aound Maintenance, which, statutorily, should be conducted on the refinery every two years.

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