24 October 2015, Abuja – The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu, who scaled ministerial screening at the chambers of the National Assembly left Nigerians with a message of hope as he unveiled new business model for the country’s refineries.
Kachikwu gave assurances that all the local refineries would start working by the end of the year to displace massive fuel imports, cut huge import bills, reduce pressure on the nation’s lean foreign exchange revenue and create multiplier effects in the domestic economy.
He reiterated his confidence and trust in the technical workforce of the refinery, saying that over 80 per cent of the nation’s technical skills pool for operations of the NNPC were competent and pointed at the achievements of the Port Harcourt Refining Company (PHRC) at rehabilitating its plants as part of the potentials available in the industry.
Kachikwu whose response to legislators’ questions presented a business flip of the Nigeria petroleum industry promised to drive operations model that would place the corporation on a performance platform that would guarantee commercial viability.
In giving detailed explanation of a reform package that would soon be activated to re-inject vibrancy in the entire petroleum industry, he pointed at plans to enhance efficiency and transparency in the sector, as well as restructure the national oil firm to be competitive across the full value chain of the industry.
He promised to build local capacity across the entire business units of the corporation to enable it live up to the roles as domestic industry leader, government’s revenue earner, custodian of national petroleum assets and lead domestic fuel market supplier.
According to him, all the programme targets would only be a dream unless operations of all the business arms of the corporation were profitable. He singled out the refineries for emphasis, pointing at their new role as profit centres, reliable fuel sources and feedstock sources for ancillary businesses.
He gave examples with the new business model at the Port Harcourt Refining Company Limited (PHRC) which he said had become the sign post of domestic technical ingenuity, internal innovation and revival model for sister refineries in Warri and Kaduna respectively.
The refineries collectively hold capacity for 445,000 barrels of crude oil processing per day, producing some 18 million liters of the premium motor spirit which is highly prized in the country as the main fuel for transportation and light machines used by homes and small businesses.
However, they have remained largely moribund for years due to poor maintenance and wrong business models as they relied on parent NNPC for administrative and funding control, a system that slowed processes and starved them of funding.
Dr. Kachikwu who is tipped to become the junior but powerful petroleum minister declared that the new business model which he said had been activated in the system would dismantle all administrative and funding constraints at all the corporation’s business units, especially the refineries, and leverage internal energies and competencies in optimising uptime at the plants.