A Review of the Nigerian Energy Industry

NNPC refutes alleged N152bn expenditure on 4 refineries

14 January 2015, Lagos – The Nigerian National Petroleum Corporation (NNPC) on Tuesday said it did not budget or expend N152 billion as recently claimed by certain politicians for the rehabilitation of its four refineries located in Kaduna, Warri and Port Harcourt.

The rebuttal is coming on the heels of the disclosure by the All Progressives Congress Presidential Campaign Organisation (APCPCO) that General Muhammadu Buhari will put an end to the veil of secrecy and shadiness that has characterised the transactions of the corporation if elected into office in the February 14 presidential election.

NNPC logoThe NNPC  a in statement by its Group General Manager, Public Affairs, Ohi Alegbe, in Abuja, asked political gladiators in the country to exempt it from their political brickbats, in their desperation for votes in the forthcoming general election.

Describing as inaccurate claims that it expended N152 billion in the Turn Around Maintenance (TAM) of its refineries, the corporation frowned on such deliberate distortion of facts and figures about its operations by “desperate vote-seeking politicians intent on gaining partisan advantage by hook or by crook.”

It noted that as a public entity with fiduciary responsibility to the government and people of Nigeria, it would remain focused on its mandate than to be distracted by the spate of politically-inspired attacks on its operations.

The corporation specifically described as fiction the recent N152 billion refineries repairs report credited to some nondescript civil society organisations and stated that the organisation is driven by an overheated imagination.

“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 statement said.

It added: “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.”

NNPC said as an alternative, a new arrangement which kicked off in October, 2014 and 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 was initiated by it.

The strategy, which it defended, also embraces the direct use of Original Equipment Manufacturer (OEM) representatives to effect major equipment overhaul and rehabilitation.

“It is projected that the new strategy would create 70 per cent 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,” the corporation explained further.

It equally hinted that over 60 per cent of TAM materials have been delivered to the 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.

It 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.

However, the APC campaign team said as part of the policy to shore up the  nation’s capacity to absorb any shock arising from the flexibility in the global oil and gas market, Buhari would ensure a comprehensive review of the entire petroleum revenue collection and reporting system to ensure full disclosure and accountability to Nigerians.

It said the Buhari administration would create a level playing field for all investors, operators and service providers in the oil and gas sector and reduce wastage and improve efficiency to ensure maximisation of government revenue

A press statement from the Directorate of Media and Publicity of the campaign in Abuja yesterday said it was apparent that the reason the country’s economy comes under heavy shock any time there is instability in the global oil market is because of corruption and lack of transparency and honesty in the way the NNPC is run.

The statement signed by the Director of Media and Publicity of the campaign, Mallam Garba Shehu,  promised that if elected into office, an APC-led government would promote credible book-keeping in the day-to-day workings of the NNPC.

“To create a level-playing field for all operators and investors in the oil and gas industry, there is an urgent need to have a clear and transparent regulatory and fiscal framework for the upstream, midstream and downstream activities,” he said.

According to him, for about 14 years, the petroleum sector has undergone several reforms to bring its operations – legal, regulatory and organizational framework – in line with international best practices.

The APC campaign, however, regretted that in spite of the huge human and financial resources that had been expended on these reforms, not much has been realised as a result of lack of commitment and political will of the Jonathan administration.



– This Day

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