A Review of the Nigerian Energy Industry

NNPC decries politicisation of its operations

…Says report of N152 billion expenses on refineries are politically induced

Oscarline Onwuemenyi 14 January 2015, Sweetcrude, Abuja – The management of the Nigerian National Petroleum Corporation, NNPC, has raised the alarm over what it termed deliberate distortion of facts and figures about its operations by desperate vote-seeking politicians intent on gaining partisan advantage.

In a statement, signed by the Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, the Corporation noted that as a public entity with fiduciary responsibility to the government and people of Nigeria, the NNPC is focused on its mandate and would not be distracted by the spate of politically inspired polemics against its operations.
NNPC Towers
NNPC Towers

Specifically, the Corporation described as fiction the recent report credited to some nondescript civil society organizations, alleging that the NNPC has committed N152 billion to execute the Turn Around Maintenance of four refineries between 2011 to 2013.

The Corporation explained that though a decision was taken in 2011 to rehabilitate all refineries using the Original Refinery Builder (ORB) of each of the refineries, the Corporation made a recourse to a new strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavorable terms.
“The nominated partners, as sole bidders came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations. The proxies were also unwilling to provide post rehabilitation performance guarantees,” the NNPC said.
It noted that the new arrangement which kicked off in October, 2014,  entails phased and simultaneous rehabilitation of all refineries using in-house and locally available resources in line with the spirit and letters of the Nigerian Content Law.
The strategy also embraces the direct use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation.
The NNPC said that it is projected that the new strategy would create 70 percent reduction in costs which would help in mitigating the financing challenges of NNPC visa-a-vis refinery rehabilitation.
“The phased Rehabilitation Programme started in October of 2014, after the required funding stream was established, and will last for 18 months,” noted the Corporation.
NNPC further hinted that over 60 percent of TAM materials have been delivered to Port Harcourt Refinery and installation of such equipment and parts is in progress while material orders and deliveries to Kaduna and Warri refineries are substantial and sufficient to operate the production process.
The NNPC therefore called on members of the public to discountenance sensational comments about its operations being bandied about by some desperate politicians who are bent on achieving partisan political objectives .
Meanwhile, the Management of NNPC has expressed its readiness to extend the harmonious working relationship it had with the outgoing Managing Director of Shell Petroleum Development Company of Nigeria (SPDC), Mr. Mutiu Sunmonu, to the newly appointed Managing Director of the company, Mr. Osagie Okunbor, adding that the synergy will go a long way in repositioning the Oil and Gas sector in Nigeria.
The Group Managing Director of the Corporation, Dr. Joseph T. Dawha, made this pledge during a courtesy call on him at the NNPC Towers, Abuja, by the top management of SPDC to formally introduce the new helmsman.
The GMD assured that the NNPC was ready to work with the new MD of Shell so that Nigeria will continue to exploit its abundant hydrocarbon resources through the joint venture arrangement between NNPC and SPDC.
Dr. Dawha who felicitated with Mr. Okunbor on his appointment also congratulated the outgoing MD, Mutiu Sunmonu, on his retirement after putting in 36 years of meritorious service. He described Sunmonu as a core professional who brought his expertise to bear on the operations of the company while in service.
Earlier, the outgoing MD of Shell, Mr. Sunmonu said the visit was to formally introduce the new helmsman of SPDC whom he said had understudied him for months before the announcement of his appointment.
Sunmonu expressed gratitude to the NNPC for all the support he enjoyed and appealed for similar collaboration with the new helmsman’s of the SPDC.
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