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NNPC GMD gives reasons for shutdown of refineries, to get private managers

The Federal Government has decided to continue with the shutdown of its 3 refineries, as part of the ongoing efforts to reposition them. 



NNPC, Domestic Crude Allocation, Why NNPC’s Duke Oil is quitting London operations for Dubai , NNPC divests stake in four oil wells to NPDC , How NNPC discovered oil, gas deposits in the North , Nigeria to leverage on condensate refineries to be petrol net exporter, How NNPC saved $3 billion from arbitration , NNPC, IPPG donate medical supplies to South West state governments, NNPC discloses bases for employment and managerial progression in the oil firm, NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

In what appears to be a never-ending situation, the Federal Government has decided to continue with the shutdown of its 3 refineries, as part of the ongoing efforts to reposition them.

This was disclosed by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, during a television interview earlier today.

These refineries, which are in Kaduna, Port Harcourt, and Warri, have rarely functioned properly for many years, despite the government’s infusion of huge investments in them.

The NNPC boss said that the corporation had decided to shut down all of its refineries in order to develop a model to upgrade them and secure enough funding for them.

(READ MORE: TCN, NNPC partner to boost gas availability, increase power supply)

Although the GMD said they have secured funding for the maintenance, he did not provide details. Note that the corporation had previously entered into several unsuccessful agreements with oil traders.

NNPC GMD gives reasons for shutdown of refineries

He said that the NNPC was looking at a different model for refineries, such as that used by the Liquefied Natural Gas (LNG). Kyari said:

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We made a very conscious decision to shut down our refineries. Today, after proper scoping, which was done in the past, we know exactly what to do to get them back on stream. We have also secured financing to make sure they work optimally.

“Aside from proper scoping, we are also going to have an Operation and Maintenance (O&M) contract, a different model of getting the refineries to work. We are looking at the NLNG structure where world-class processes will always be in play. We’ve seen it work with success.”

Getting Nigeria’s refineries to work efficiently and regularly has, for many decades, remained a mirage due to deep-rooted corruption in the oil industry.

In a related development, the NNPC GMD said that the corporation will no longer be involved in the management of the nation’s refineries after their rehabilitation.
He disclosed that upon completion of the ongoing rehabilitation exercise, NNPC will engage the services of a company would manage the plants on an Operations and Maintenance (O&M) basis.

He explained that the ultimate plan is to get private partners to invest in the refineries and get them to run on the NLNG model where the shareholders would be free to decide the fate of the refineries going forward.

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(READ MORE: NNPC seeks Russian firms’ partnership to revamp oil refineries)

Mallam Kyari stated that this model, which is totally different from previous approach, would guarantee the desired outcome for the refineries.

It could be recalled that in January this year, the Nigerian senate, resolved to probe the corporation over the sum of $396 million which was spent on turn-around maintenance of the refineries, between 2013 and 2015, without any positive result, as the country has continuously imported almost all its petroleum product needs.

Members of the upper chamber expressed their displeasure at the moribund state of these refineries in the last 15-20 years, due to lack of proper maintenance.

These refineries have hardly operated at more than 15% capacity utilization per annum.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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    FG to commence construction of 4 new rail projects across the country

    The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.



    Rotimi Amaechi, Minister of Transport, Nigerian railway contract with CCECC and CRRC, China Civil Engineering Construction Corporation, Chinese Railway Rolling stock Corporation

    The Minister of Transportation, Rotimi Amaechi, has said that the Federal Government is about to commence 4 new rail line projects in various parts of the country.

    The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.

    This disclosure was made by Amaechi while speaking at the annual ministerial press briefing on programmes, projects and activities of the Federal Ministry of Transportation and its agencies on Friday in Abuja.

    READ: FG to fully launch E-ticketing platform for NRC next week

    What the Minister of Transportation is saying

    Although the Minister announced that the Federal Government was about to start the rail lines project, he was not specific on the exact dates the projects would start.

    Amaechi, in his statement, said, “We have awarded the following contracts and we are about to start and we have even tried to solve the financial problems. This is because we have the problem of having to hire consulting engineers.

    READ: $2 billion Kano-Maradi rail would be completed in 36 months – FG

    “The ones we are about to start include Ibadan to Kano, we are waiting for funds from China. We are about to start Port Harcourt to Maiduguri, we are waiting for the cabinet to approve consulting shares. We are also to start the Kano-Maradi and Lagos to Calabar.

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    “But one thing that is unique about these contracts is that the president early enough directed that all rail lines must stagnate at the seaports.

    “That is why there may be a bit of adjustment in the pricing of Kano-Maradi because we have to adjust it to link up to Kano-Lagos so that it can terminate at Lagos seaport.’’

    The Minister pointed out that the 185.5km Lagos-Ibadan double standard gauge line with extension to Apapa seaport was nearing completion, while the 186km Abuja-Kaduna and 302km Warri-Itakpe standard gauge lines had been completed and were functional.

    READ: FG urges contractors to complete Ebute Meta–Apapa seaports railway extension by January 2021

    What this means

    • The various rail line projects are part of the ambitious plan by the Federal Government to create a nationwide rail network that is intended to help in the country’s diversification efforts, away from crude oil.
    • Some of these rail projects will also help to decongest the Apapa ports in Lagos and serve as a route for the import and export of goods in the West African sub-region.

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    Customs Tin-Can Island Command generates N112.7 billion in Q1 2021

    This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.



    The Nigerian Customs Service revealed that its Tin-Can Island Command has a first-quarter revenue of N112.7 billion in 2021. This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.

    This was disclosed by Mr Mba Musa, Customs Area Controller, in a statement on Friday.

    “The comparative analysis of quarter one revenue collection from 2018 to 2021 are as follows: in 2018, N76,789,721,107.42; in 2019, N78,857,106,168.27; and in 2020, N91,635,998,490.73,” the customs boss said.

    READ: Customs revenue rises by N200 billion to hit N1.5 trillion in 2020

    “This improvement is despite the twin threat to lives and livelihood posed by the COVID-19 pandemic. The command has inspired their officers to continue to work hard while observing all the safety measures to achieve the best of performance.

    “We kept our lines of communication open and concerted effort was made to ensure that the supply chain is not disrupted,” he added.

    READ MORE: Customs officers must declare their assets annually – Customs boss

    What you should know: The Nigeria Customs Service (NCS) generated a revenue of N1.5 trillion for the year 2020, a rise compared to N1.3 trillion in 2019.

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