3 January 2014

Nigeria: Govt Backtracks, Shelves Plan to Sell Refineries

Photo: Africa Undisguised
Oil rig in Nigeria.

In a bid to appease the oil unions, which have threatened industrial action over the planned privatisation of the country's four refineries, the federal government has been forced to backtrack on the planned sale of the plants.

The four refineries - the 150,000 barrels per day (bpd) Port Harcourt Refinery, 60,000bpd, Port Harcourt Refinery, 110,000bpd, Kaduna Refinery and Petrochemical complex and the 125,000bpd Warri Refinery and Petrochemical complex - have operated sub-optimally under government ownership for almost two decades, forcing Nigeria to import petroleum products to meet its energy needs.

Following successive failed attempts by various administrations to maintain and run the plants over the years, the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, had in November 2013 announced the federal government's intention to commence the privatisation of the four plants by the first quarter of this year.

The Bureau of Public Enterprises (BPE) was given the responsibility of driving the privatisation process in collaboration with the petroleum ministry and the Nigerian National Petroleum Corporation (NNPC).

However, since the planned sale was announced, the unions led by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) have kicked against the privatisation and threatened to embark on strike.

Besides, powerful interests in the country would rather the privatisation of the refineries is either stopped or three out of the four plants are sold solely to them, as this could impede their planned investment in the downstream segment of the oil and gas sector.

Wading into the issue yesterday, the presidency said the federal government had no plans to sell the four refineries and called on the unions to shelve their strike.

Making this known, the president's Special Adviser, Media and Publicity, Dr. Reuben Abati, said: "Government is not going to sell any refinery. There is no such plan and there is no presidential approval for such. Nobody, not even the Minister of Petroleum has the powers to sell any government property."

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