Reasons forces are against government-owned refineries working in Nigeria

Forces that had frustrated the coming on stream of government-owned refineries up until Tuesday, this week, have yet to recover from the coup de grace that the management of the Nigerian National Petroleum Company Limited (NNPC Ltd) executed against them with the commencement of production and truck loading at the old Port Harcourt Refinery.

THE CONCLAVE reports that some forces in the oil sector had consistently conspired with insiders at the government-owned refineries in Port Harcourt, Kaduna, and Warri, to embark on systemic vandalism and disruption of the facilities to prevent them from coming on stream to bolster the nation’s energy security such that it would not be the exclusive preserve of any private refinery.

To consummate the Tuesday commencement of production and truck loading at the Port Harcourt Refinery, this medium learnt that the management of the NNPC Ltd, led by the Group Chief Executive officer (GCEO), Mele Kyari, practically slept in the facility for a week to honcho the process to completion.

The decision, as learnt, entailed the GCEO giving other topmost officials the marching orders to relocate to the facility to keep vigil against the backdrop of coordinated process that had seen elements in the refinery cut cables and remove critical parts just to make the refinery not to work.

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THE CONCLAVE reports that feelers from the NNPC Ltd indicated that with the successful commencement of production at the 60,000bpd Port Harcourt Refinery, and the ongoing rehabilitation of the facility that refines 150,000 bpd, the company has aslo doubled down on rehabilitation of the 125,000 bpd Warri Refinery, which is slated to come on stream next year.

Details of this rehabilitation process and the timeline for commencement of production are being kept under wraps. This newspaper learnt that just as the Port Harcourt Refinery commenced production without prior announcement, NNPC Ltd is planning a similar scenario.

■ Reasons some forces don’t want the refineries to work

THE CONCLAVE reports that 445,000 barrels of crude oil per day are being shared by all refineries in the country at the moment even as between 1.5m and 1.6m litres of Premium Motor Spirit (PMS) on a daily basis. It was learnt that the NNPC has been able to boost the figure to between 1.8m and 1.9m litres per day. By year end, the figure is expected to hit the 2m litre-per-day mark.

It was gathered that out of the 445,000 barrels of crude oil made available to local refineries by the NNPC, Dangote Refinery gets 300,000 while the remaining 145,000 barrels are shared by the other small refineries.

THE CONCLAVE reports that with the Port Harcourt Refinery coming on stream, Dangote’s share of 300,000 barrels per day could be reduced by as many as 50,000 barrels, which would be channeled to the Port Harcourt refinery. It is expected that the figure will further reduce when Warri and Kaduna Refineries begin production of PMS.

Industry analysts and watchers argue that Dangote Refinery does not want any other refinery to come on stream so that it could enjoy the benefit of massive crude feed stock.

A source close to the development explained that Dangote Refinery could diversify its feed stock sources instead of its bid to grab all the available being supplied to the refineries by the NNPC Ltd, explaining that the US does produces 13.5m litres of PMS on a daily basis.

The source said that the US just bought two vessels of NNPC Ltd’s Utapate crude newly introduced to the international market, pointing out that “it is the responsibility of refineries to look for their feedstocks.”

He also hinted at the political decision to sell crude to refineries in naira, saying that it was not well though-out as Dangote Refinery is producing and selling PMS in dollars after buying in naira.

This, he said, was denying NNPC Ltd the forex that could have been made for the country had the political decision not been taken by the federal government.

It was learnt that the oil majors have refused to sell their crude to Dangote Refinery in Naira because crude oil, as an international product, is priced in dollars.

THE CONCLAVE reports that some local players in the refining subsector of the oil and gas sector of the economy had been working round the clock to ensure that government-owned refineries in Nigeria did not work so that they could maximize the situation to their advantage.

There has, however, been excitement in the Presidency and other quarters over the breaking of the age-long jinx that had bedeviled the government refineries, when on Tuesday, this week, the old Port Harcourt Refinery commenced production.

THE CONCLAVE reports positive feelers about the expected commencement of production of PMS by the Warri, Kaduna, and BUA refineries in some few months from now.