Proposed sale of refineries was to rip-off Nigerians – PENGASSAN

Warri-refinery06 February 2014, Lagos – Last month, after a meeting between Federal Government officials and labour leaders in the Nigeria’s petroleum industry, the planned privatization of the four public refineries was jettisoned and the planned shutdown of the sector by labour was similarly suspended. In an interview with Sweetcrude, one of the labour leaders at the meeting and Chairman of the Lagos zone of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Rev Folorunsho Sunday Oginni, among others, gives insight on how the planned sale would have rip-off the nation. Excerpts:

Now that labour leaders have reached agreement with the Federal Government that the refineries would not be privatized, at least for now, what’s next?

We are threading with what I can call caution. The issue of the refineries, we shouted and thank God and the media for the role played. People need to ask why we were against the sale of the refineries and why are we against this privatization? I explained to a cross section of Nigerians when I appeared recently on a television programme. As we speak today, I stand to be corrected, that none of the so-called privatised companies has so far been making profit. We privatized Daily Times of Nigeria, as we speak today, Daily Times has never returned to the news stand.

The story that we have been hearing and have been reading and has been confirmed is that the people that bought the Daily Times of Nigeria have sold all the assets of the company. All the guest houses in Lagos, even the one in London, and all other assets have been sold off. The promise they made was that they were going to revamp the Daily Times and restore it to its place of pride. That never happened.

If you ask what happened to NICON Insurance that somebody bought as a privatized company, today about 8,120 staff have been sacked and as we speak, they have not even gotten their entitlements. NICON Insurance has gone down. Air Nigeria, formerly Nigerian Airways was sold, as we speak, there is no single aircraft that is flying in that fleet.

When you go to the downstream sector of the Petroleum Industry, you talk of African Petroleum, you talk of former National Oil and so on, their story is disheartening. Before these companies were privatized, we were the custodian of the workers because they were our members. The number of PENGASSAN members in these companies were 8,520 and as we speak, they are less than 1000 and 95 percent of them as at today are contract, outsourced and casual workers.

The buyers are people who would promise government and the nation heaven and earth before privatization, but after privatization, these so-called new investors would destroy the companies. So, as at today, we have not seen any of the so-called privatized companies that today is a success. Yet some un-informed Nigerians would say, what about the GSM? We have continued to educate them that it was not NITEL that was privatized, people that operate the GSM companies today brought their money and set up their own companies. That is why you see them making profit and expanding. Till today, NITEL is moribund and has not been privatized.

Back to the refineries, we started the OGIC (Oil and Gas Implementation Committee) and our members were there representing PENGASSAN and NUPENG (Nigeria Union of Petroleum and Natural Gas Workers). It was a robust discussion and everything that was needed in the oil industry was discussed. The government however, came and said OGIC would not work and discarded it.

They said it was going to be Petroleum Industry Bill (PIB). We said no problem. But as we speak, they did not allow any of our members to represent the yearnings of oil workers or our input in the public hearing. We did not bother because since it is for Nigeria, we participated and are still participating in PIB issues.

Today, the PIB has not been allowed to see the light of the day. At the last sitting of the immediate past Senate, the Senate President, David Mark told Nigerians that if they were able to return to the senate, that the first bill they would attend to was going to be the PIB. As God would have it, they came back and after three years, and elections are coming next year, the PIB has not seen the light of the day.

What many people do not know is that, the PIB has already taken into consideration all that is needed for our refineries to work and be a success story. Do you know what, we discovered that government wanted to rush the sale of the refineries because all the spare parts for the Turn- Around- Maintenance (TAM) are already in the ship coming to Nigeria and will arrive any moment.

That was why some people were pressuring government to sell the refineries as scraps so that when the spare parts come, they would take the spare parts to do the TAM and tell Nigerians that they have done the magic and that the refineries are now working. We have been talking about TAM for more than 10 years. Late General Sanni Abacha awarded the contract twice for the TAM, but nobody did anything in spite that the contract sum was paid. Till today, government has not apprehended anybody. We insisted that no, you cannot sell the refineries, you must wait for the spare parts to come, do the TAM and let us see what would happen next. Because they are people that want to reap off the nation from the sale, they were pressuring the government.

People have argued that private sector will manage the refineries better as Nigerian government has no history of any successfully managed enterprise. What is your response?

Many of our so-called businessmen that we celebrate as successful in Nigeria, are not really businessmen. All they do is to feed fat on public fund. The question is, why is the PIB not signed into law? Who is afraid of the PIB? These people know quite well that if PIB is signed into law, all these problems confronting the nation’s oil and gas sector have been addressed by the bill.

These refineries we are talking about, they were built pre-1989 and those who built the refineries recently had declared that the technologies used in those refineries had been phased out. What is stopping us from building more refineries? To build a refinery today is about 4billion US Dollars. We produce not less than 2.4 million barrel of crude oil on daily basis and we sell at 108 Dollars, which is the price all over the world.

Going by that calculation, we are making about 41.2 billion US Dollars daily. The next question you will ask is, where is this money going? When you look at our roads, it is nothing to write home about.

Education, you are living witness to when lecturers went on strike for over five months. Electricity, we do not have and infrastructure generally, in every ramification, you cannot equate us with ordinary Ghana here. The question that is begging for an answer is, if you are making over 41 billion dollars daily, why is poverty still ravaging the country?

Do not forget that we have the capacity to produce more than 2.4 million barrel per day, but because of ceiling by the Organisation of Oil Producing Countries (OPEC) which we are a member. Singapore is a country that does not have crude oil, they import, yet they have about 62 refineries. They buy the crude, refine and make huge profit. Why is that Nigeria that has the crude, the manpower is wasting because of nothing to do, cannot build refineries.

We had a meeting with government’s officials, they said because Nigeria is not running it well, Nigeria cannot build refineries. We told them that there is a panacea for that, go ahead and build even if it is one, one in each six geographical zones. Today, businessmen are building industries but are not the ones running them. We can name many hotels that are springing up in Lagos and other parts of the country.

If you go to Victoria Island and Ikoyi, most of the hotels you see there, the people that built them are not those running them. They gave them to those that have the managerial or technical know- how. We told them this is a simple thing, build the refineries and if necessary take World Bank loan. The bank would be very happy to give you loan for it and after building it, you can give it to those who will run it on your behalf and set a target for them.

For instance, within four or five years, I want my money back. But they are not ready to build new refineries. Do you know why? If more refineries are built, there will be no more importation and there will be no more subsidies where their cronies and fronts have been reaping off the nation, those that finance their election and stay in government.

We have argued that even if the refineries are to be sold you must sit down with us as oil workers to discuss labour and related issues. The fate of the workers in the refineries is not the primary issue, the issue is that we do not have reason as a nation to be importing fuel. The four refineries if they produced at 100 percent installed capacity; will produce 18.2 million litres per day. But because of age and others, they cannot produce at such.

In Nigeria today, we are consuming over 38 million litres per day and if you look at the gap between 38 and 18, it is very wide. This gap, nobody is talking about how to close it. But we are very much interested in importation and subsidy. Niger Republic recently discovered oil and they have built a refinery. When the President was asked, your country is a very small country, when you refined from this automated refinery, where will you sell the refined products? His response was that selling is not a problem. He said they have a ready market in Africa alone. When he was asked to substantiate, he said Nigeria is a big market for their refined petroleum products. What an insult to the so-called giant of Africa.

You and government agreed to develop workable business models for the refineries. Can you substantiate on this?

If you are conversant with the story of Nigeria Liquefied Natural Gas (NLNG), you will know that today NLNG is producing and moving forward. What we have in mind is for government to do the TAM and then follow the NLNG model. Visit Port Harcourt or Warri refinery and see how Nigerians are using their ingenuity to fabricate and make the obsolete equipment in the refineries to function.

– Victor Ahiuma-Young, Vanguard

About the Author