Senate investigates N11.35trn turnaround maintenance on refineries
Oct. 24, 2023
The Senate has tasked its ad- hoc committee to investigate all contracts awarded for rehabilitation of all state owned refineries from 2010 to 2023.
This followed the adoption of a motion on “Urgent need to investigate various turnaround maintenance projects of Nigerian refineries, to uncover waste and forestall further waste of scarce public resources, by Sen. Karimi Sunday (APC- Kogi) at plenary on Tuesday.
Presenting the motion, Sunday said state owned refineries in Nigeria had been a serious drain pipe of public finance, depriving citizens of joy of being an oil producing nation.
He said from 2010 to date Nigeria was estimated to have spent N11.35 trillion on renovation of refineries, yet unproductive, revealing that other cost in other currencies had also been spent.
Sunday said the Federal Government had spent over N6 trillion between 2010 and 2020 on fuel subsidy due to Nigeria’s low refining capacity and had spent almost twice the amount on rehabilitating and turn around maintenance projects on its refineries in Port Harcourt, Kaduna and Warri between 2010 and 2022.
He said in spite of the moribund condition of the four refineries, the operating costs of the refineries between 2010 and 2020 was N4.8 trillion.
“The refineries are estimated to make cumulative loss of N1.64 trillion within four years.
“Concerned that the federal government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven years from 2013 to 2019.”
He said phase I of the project was expected to be completed in 28 months after the contract, while phase II was to be completed in 24 months and phase III in 44 months of execution.
He, however, said the Port Harcourt refinery as at Oct. 24, remained a money pit.
He said by projections and representations from NNPCL, the renovation work ought to be completed and operations of the refinery commenced by June 2023.
Sunday said federal government in a bid to revitalise the Warri Refinery, the Federal Government had injected huge public funds between 2014 and 2019.
That particularly, around the 24 June 2022 the Federal Executive Awarded Maintenance Services for Quick Fix Repairs of Warri Refinery to Daewoo Engineering and Construction Limited at 497, 328, 500.00, dollars.
” Yet at the moment the Warri Refinery is inactive, this is different from the 2017 contract award to Saipem Contracting Nigeria Limited for Tech Plant Survey of the Warri and Kaduna Refineries at 2, 025, 000.32 Euros,” he said.
He also said it was disturbing that the Kaduna refinery and Petro-Chemical Company (KRPC) had over the past 10 years gulped N2. 266 billion in the name of rehabilitation, yet it remained unproductive.
“The Nigerian National Petroleum Company Limited (NNPCL) approved a renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna refinery in February 2023.
” And it is intended to restore the refinery to production of 110,000 barrels of petrol per day, at least 60 percent capacity by early 2024,” he said.
He expressed worry that if a thorough investigation of the past and current rehabilitation project was not undertaken by the Senate, the circle of awarding unproductive turn around maintenance contracts may not abate.
This, he said would result in retaining the status quo, adding that rehabilitation contracts have become conduit pipes for siphoning pubic funds.
He said Nigerian citizens had continued to groan over high cost of petroleum products due to the moribund situation of the state owned refineries.
Contributing, Sen. Isa Jibril (APC-Kogi), who seconded the motion said the motion brought to the fore, the worrisome situation in the nation’s oil and gas sector.
He said it was worrission that N4.8 trillion was spent on operating cost when the refineries were not functional.
Sen. Adams Oshiomhole(APC- Edo) said the senate must ensure its proper oversight functions to ensure Nigerians enjoy value for their tax.
“We need to unravel while the refineries that were working before suddenly became moribund.
“The amount so far spent on the refineries can build brand new ones, Senators must take the issues with all seriousness it deserves,” he said.
Sen. Adamu Aliero said the refineries had remained moribund in spite of huge sums spent on turnaround maintenance.
He alleged that the moribund nature of the refineries was a deliberate sabotage by some persons who wanted to continue petroleum products importation into the country.
The Senate also urged the committee to ascertain progress on ongoing works in all refineries to forestall waste and corruption.
It also urged the committee to interrogate the Ministry of Petroleum Resources, the NUPRC, NNPCL, BPE, on the best approach to commercializing or ensuring profitability of the state owned refineries.
It urged the committee to invite the NNPCL, NUPRC and LNG to explain the nation’s preparation for green energy sources in line with the Paris Agreement on climate change.
Deputy President of Senate, Barau Jubrin, who presided over plenary said those found to have taken resources meant for functioning of refineries should be brought to book.
He thereafter named Sen. Isah Jibrin (APC -Kogi as Chairman of the ad-hoc committee.
Other members of the committee included Sen. Abdullahi Yahaya (PDP- Kebbi) Sen. Adamu Alero (PDP-Kebbi), Sen. Ifeanyi Ubah(APC-Anambra) and Sen. Sunday Karimi Sunday (APC- Kogi).
The committee was to present its report in four weeks. (NAN)