A Review of the Nigerian Energy Industry

NNPC to sell non-performing refineries, says Kachikwu

25 September 2015, Sweetcrude, Lagos – The Nigerian National Petroleum Corporation, NNPC, would sell any of its refineries that failed to function optimally by the end of this year.

Warri Refinery.
Warri Refinery

NNPC Group Managing Director, Dr. Ibe Kachikwu, revealed this, Friday, in Lagos at his first interactive session with journalists since his appointment as group managing director.

Kachikwu, who maintained that he had chosen first to meet with the Nigerian media before giving the foreign media opportunity for interaction, had recently given the management of the nation’s four refineries in Warri, Kaduna and Port Harcourt a 90-day ultimatum to turn the plants around and bring them into operation.

But the group managing director said during the media chat in Lagos that at the end of the 90-day period in December, any non-performing plant would likely be sold.

The NNPC, he also said, would urgently embark on a transparency operation to regain its lost credibility, adding that the transparency operation would start with an audit of the corporation’s finances, which was last audited in 2010‎.

He said the corporation’s finance would not only be audited and brought up to date, but would also be made available to the general public.

The NNPC GMD said the transparency operation would also involve posting of the corporation’s activities on its website regularly.

He added that along with the regular data, there would also be a weekly broadcast of issues concerning the corporation on its website from now henceforth.

“Contracts will be made open to the public and we will choose the best module that works for us and that helps us save money.

“We need to clean the system and carry everybody along. The concept of what is right and wrong will take us very far,” Kachikwu stressed.

According to him, though, there were huge challenges in driving the corporation forward, but they would be surmounted with good planning and efficiency.

The NNPC GMD said the challenge of cleaning NNPC would be a bumpy, exciting ride, which would eventually yield positive results.
Commenting on the state of the nation’s refineries, he said they were currently working at 30 percent capacity, which was unprofitable.

Kachikwu noted that for the refineries to be profitable, they needed to attain a minimum of 60 percent operation capacity.

“Personally, I would have chosen to sell the refineries, but President Buhari has instructed that they should be fixed.

“After they are fixed, if they still operate below 60 per cent, then we will know what to do.

“The 90-day ultimatum for the refineries to be fixed will end in December and Port Harcourt Refinery looks like the only one that will meet the deadline, but we will wait and see what happens at the end of the 90 days,” he said.

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