The Nigerian Senate has mandated its special committee to look into all contracts worth around N11.4 trillion made between 2010 and 2023 for the rehabilitation of all state-owned refineries.
Sen. Karimi Sunday (APC-Kogi) had proposed a resolution that was approved by the whole Senate on Tuesday, titled “Urgent Need to Investigate Various Turnaround Maintenance Projects of Nigerian Refineries, to Identify Waste and Prevent Further Waste of Limited Public Resources.”
When introducing the motion, Sunday said that Nigeria’s state-owned refineries had been a significant drain on the country’s finances, robbing its people of the satisfaction of living in an oil-producing nation.
He said that Nigeria had spent N11.35 trillion on refinery renovations since 2010, but they had been ineffective. He further disclosed that additional expenses in other currencies had also been incurred.
Sunday said the Federal Government had spent over N6 trillion between 2010 and 2020 on fuel subsidies due to Nigeria’s low refining capacity and had spent almost twice the amount on rehabilitating and turnaround 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 a 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.”
According to him, phase I of the project should be finished in 28 months following the contract’s execution, phase II in 24 months, and phase III in 44 months.
However, he said that as of October 24, the Port Harcourt refinery was still a money trap. According to his claims and those of NNPCL, the repair work should be finished and refinery operations should begin by June 2023. Sunday reported that between 2014 and 2019, the federal government invested significant public funding in the Warri Refinery in an effort to revitalize it.
Specifically, on or about June 24, 2022, the Federal Executive awarded Daewoo Engineering and Construction Limited Maintenance Services for Urgent Repairs of the Warri Refinery 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 deserve,” 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 the functioning of refineries should be brought to book. He thereafter named Sen. Isah Jibrin (APC -Kogi as Chairman of the ad-hoc committee.
Jubril will investigate the matter alongside the Chairmen of committees on Petroleum Resources Downstream, Upstream, Gas, Finance, Appropriation and Public Accounts. 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.
