Oil workers plan to resist sale of refineries

Warri-refinery02 December 2013, Lagos – Oil workers under the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the National Union of Petroleum and Natural Gas Workers (NUPENG), have said they would resist the Federal Government’s plan to sell the nation’s refineries.

The two trade unions said their opposition to the sale is against national interest and that the country would not benefit from the exercise.

PENGASSAN President, Comrade Babatunde Ogun, claims the deal could benefit some government’s officials’ cronies.

He said the reasons for the problems at the refineries were that the government underfunded the refineries and refused to carry out Turn-Around Maintenance (TAM), and supply crude to them.

He explained that instead of opting for sale, the Federal Government should adopt a modified process tailored towards the Nigerian Liquified Natural Gas (NLNG), with the National Oil Company (NOC), as owners of the four refineries holding a substantial minority shares, while core investors/local participation hold the working majority with the staff, trade unions, and the host communities holding minority shares.

He advised that the government to deal with the problem of pipelines vandalism that hamper the supply of crude oil to the refineries as well as carry out TAM and see if the refineries would not work.

Ogun said: “The proposed sale of the refineries is against the overall national interest, but in the interest of a few, who are lurking around the corridors of power to milk the country dry. How can a country be selling all its national assets in the name of privatisation? For whose benefit are such sales?

“If you recall, the late President Umaru Yar’Adua reversed the privatisation of the refineries by former President Olusegun Obasanjo, with a promise to carry out Turn-Around Maintenance (TAM), on them to ensure that they were sold not as scrap. On assumption to office, President Goodluck Jonathan also promised to carry out TAM on the refineries.

“Even the controversial Kalu Idika Kalu-led National Refineries Special Task Force also had TAM or rehabilitation of the refineries to make them work in a safe and reliable manner as part of its recommendations. As we are talking now, nothing has been significantly done.

“Why is the government proposing the sale of these national edifices without doing the needful to ensure that the refineries work at their optimal capacity? Nigerians and the public deserve to know more on the desperate reasons for the spate and row of proposed privatisation, even when the selfish motives of these proposed national assets sales can spell doom for the country.”

He also said the refineries should be entities independent of either the Nigerian National Petroleum Corporation (NNPC) or the proposed NOC as in the Petroleum Industry Bill (PIB), while the board of management of each refining company should be fully responsible for its success and failure.

Ogun said those planning to sell the refineries and their cronies planning to buy them should emulate Alhaji Aliko Dangote and establish their own refineries instead of waiting to corner the nation’s common investment.

He also said instead of privatising the refineries, the government should grant effective incentives to allow for the development of private refineries alongside the existing ones, adding that a framework should be articulated that will make available, required crude for effective functioning of local refineries.

“There is need to incentivize and,or compel IOCs to refine an agreed percentage of crude oil in the country. A suggestion is to tie upstream licensing to downstream investment and private ownerships of jetties should be encouraged.”

“As the privatisation trend continues, the Nigerian public will need to know from the process drivers, the number of jobs and investment that have been created as against the reality that some cronies are now being recruited as technical partners to front for the high and mighty as was the case with Eleme Petrochemicals Company Limited, which the government sold to Indorama for $225 million, a mega plant that is the second largest in Africa, which at the time of its sale was worth about $2.5 billion as fair market value.”

He continued: “Also at the time of the sale, the company was fully stocked and the materials needed for its TAM were being bought by the government. It only required working capital that was persistently blocked by bureaucratic bottleneck and undue government interference that delayed its efficiency.”

“Petroleum Minister Mrs Diezani Alison-Madueke said two weeks ago that the nation’s four refineries would be put up for sale by the first quarter of next year.

“We would like to see major infrastructural entities, such as refineries moving out of government’s hands into the private sector. Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over all these years.”

“We are right now undergoing a major turnaround maintenance programme” of the refineries, Mrs Alison-Madueke said.

– The Nation

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