In a move aimed at boosting efficiency and productivity, the Nigerian National Petroleum Company Limited (NNPCL) is seeking to transfer the operations of the Port Harcourt Refinery to private entities.
This was disclosed in an expression of interest notice issued by the NNPCL on its website and shared on its X (formerly Twitter) page on Monday.
The Port Harcourt Refinery, which is in Rivers State, is one of the four refineries owned by the NNPCL. The refinery has a refining capacity of 210,000 barrels per day (bpd) but has been bedevilled by years of neglect and operational challenges.
- The NNPCL stated that it is looking for “reputable and credible Operations & Maintenance (O&M) companies to operate and maintain one of its refineries, Port Harcourt Refining Company (PHRC), to ensure reliability and sustainability towards meeting the nation’s fuel supply and energy security obligations.”
The contract for the operation of the refinery will cover a wide range of refinery business processes, including crude oil receipt and storage, refining, product storage and distribution, and maintenance.
Interested companies must have a minimum average annual turnover of at least $2 billion for the fiscal years ending in 2019, 2020, 2021, and 2022. They must also have a proven track record of operating and maintaining refineries of similar size and complexity.
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The Port Harcourt refineries are part of the state-owned refineries in Nigeria that have remained moribund for several years. However, the government is making efforts to revive these refineries as part of a strategy to reduce the nation’s dependence on imported refined products.
In March 2021, the federal government approved a $1.5 billion contract to repair the 210,000-barrel capacity Port-Harcourt refinery. The rehabilitation project, entrusted to the Italian company Tecnimont SPA, was slated to unfold in three phases spanning 18, 24, and 44 months.
By December 2023, the NNPCL announced the successful completion of the Area 5 section of the Port-Harcourt refinery, including the mechanical completion and flare start-up.
Also, the CEO of the NNPCL, Mele Kyari, stated that the second phase of repair works of the Port-Harcourt refinery will be completed by the fourth quarter of 2024.
The NNPCL also stated that a test run on the 60,000-bpd refinery in Port-Harcourt will be completed this month ahead of the full resumption of work later.
The NNPCL’s decision to hand over the operation of the Port Harcourt Refinery to private entities is a significant step in the ongoing reform of the Nigerian oil and gas sector. The move is expected to attract much-needed investment into the refinery and improve its operational efficiency.
It is also expected to lead to increased domestic production of refined petroleum products, which will reduce Nigeria’s dependence on imported fuel.
VERY GOOD MOVE!