The Federal Government has suspended indefinitely its plan to sell Nigeria’s refineries following requests by the Nigerian National Petroleum Corporation to allow the corporation to revamp the dormant facilities.
This is as the government has pointed out that there are ongoing efforts to resolve all the issues affecting the Ajaokuta Steel Complex, although they are quite complicated.
This was made known by the Director-General, Bureau of Public Enterprises (BPE), Alex Okoh, who spoke to journalists in Abuja while presenting updates on the bureau’s 2021 work plan, according to The Punch.
The BPE boss said all the refineries under the NNPC management were in various stages of non-production.
What the BPE Director-General is saying
Okoh in his statement said, “We have four refineries with a refining capacity of 445,000 barrels per day and they are all at various stages of non-production. I don’t have the figures correctly, but I think that Warri would be around five %, Port Harcourt around 19 (or) 20 %, and Kaduna is zero.
“Our plan initially was to suggest to the Federal Government that we should privatize these refineries, no need to put in more money, especially given the fact that you also have private investors going into space.
“Dangote (Refinery) is looking at about 650,000 barrels per day, so the combined refining capacity for all of our four refineries is not even up to that. This means you are going into space where the competition will almost kill you.”
“So we thought we should privatise, but NNPC believes that the plants can be rehabilitated and they have got the government approval to go ahead and rehabilitate the refineries.
“So we have dropped the privatisation from our 2021 plan. But I’m sure we will follow with keen interest how the rehabilitation programme of the NNPC will go from here,’’ he added.
While speaking on Ajaokuta steel Company, he described the problem with the plant as being very complex.
Okoh said, “For Ajaokuta, it’s a very complex issue. Currently, there are negotiations with GINL, who are the original concessionaires of Ajaokuta and it’s a very complex problem to untangle.
“But I can, without divulging too many details, state that we are close to being able to resolve the issue, especially the litigation around Ajaokuta and once that is done we can then go ahead and make a decision on what to do with Ajaokuta.”
Okoh said the Federal Government planned to generate a total of N493.4bn from the sale or concession of about 36 of its assets across the country adding that the Transmission Company of Nigeria was up for concession.
What you should know
- It can be recalled that in April 2021, NNPC signed an Engineering, Procurement & Construction (EPC) contract with Tecnimont SpA, a subsidiary of Maire Tecnimont for the rehabilitation of Port Harcourt Refining Company at $1.5 billion
- This is coming after the Federal Government had earlier in the year stated that it would privatize or concession some of its assets including the refineries in order to raise funds to fund the 2021 budget.
- The BPE had earlier in the year itemised Nigeria’s refineries as assets to be privatised and classified them as core investor sales, but the amount to be earned from the facilities was not stated as of then.