Nigeria: Hope Rises for Nigeria's Refineries

26 September 2019

Ever since his appointment as the Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari has maintained his resolve to see to the full repair of the nation's moribund refineries and this has been gathering momentum by the day.

Since his appointment as the 19th Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) by President Muhammadu Buhari, Mallam Mele Kyari has not hidden his desire to transform the country's oil and gas industry.

Mele Kyari has in many occasions declared his resolved to ensure that the country's refineries in Port Harcourt, Warri and Kaduna are refurbished in record time.

For instance, while taking over the mantle of leadership of the NNPC in Abuja in July, at a valedictory session for his predecessor, Mele Kyari had outlined his vision for the corporation. Top of his agenda was the ailing refineries and his plan for the them to come alive fully.

He had vowed to reverse the trend of petroleum products importation in the country by rehabilitating the existing refineries and encouraging private sector investment in the refineries sub-sector.

"We must end the trend of fuel importation as an oil producing country. We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries.

"We will support the Dangote refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023," Mele Kyari stated in his address at the occasion.

Also, while speaking at the 2019 Society of Petroleum Engineers (SPE) Nigeria annual conference and exhibition recently, Mele Kyari expressed worry over the poor state of the refineries, describing it as a shame on Nigeria.

He also at the occasion, bemoaned the position of the country as a net importer of petroleum products rather than net exporter.

"Today, NNPC is challenged by the reality of our environment. Because our refineries are not operating optimally and today, not at all, we become net importer of petroleum products; it is a very big shame on us as a nation, and as professionals.

"We can give you any excuse whether you are a chemical engineer or petroleum engineer, or scientists, whatever we are, today, it is a shame that this nation is a net importer of petroleum products and we are going to change that," he had said.

According to him, the corporation was going to achieve that using two methods.

"One is that, NNPC will get its acts together; we will fix refineries, and there are other initiatives. Of course, there are other small interventions to support modular refineries that people are trying to build; that we will work with the permanent secretary to make sure we fix it.

"We know why they are not doing it; the reason is very simple... so we will fix that so that there is clarity... ."

Notably, many former GMDs and past ministers of petroleum had, while in office, promised to get the refineries working again but were unable to achieve it.

This has resulted in Nigeria importing most of the petroleum products it uses to run her domestic economy, an unpleasant development that pushed former Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, to threaten to resign his ministerial portfolio by May 2019 if Nigeria continued to import petrol.

Considering these past failures, many Nigerians, particular industry watchers, commentators, and even some operators are a bit sceptical as to whether Mele Kyari will weather the storm and live up to his promises.

Renewed Hope

However, in all these, the GMD has continued to rekindle hope of seeing the refineries come alive again, specifically saying that their full refining capacities will to be restored in 2022.

During his maiden official visit to the Port Harcourt Petrochemical and Refining Company recently, the NNPC boss stated that repair works on the refineries in Port Harcourt, Warri and Kaduna, which have remained decrepit for years would begin in January of 2020.

He said that the refineries would again be able to refine crude oil at optimum capacity by 2022.

Mele Kyari, explained that that full rehabilitation of the plants would commence in January of 2020, and that he was committed to ensuring that the refineries deliver real time value and address the petroleum needs of Nigerians.

He said making the refineries to operate at optimal capacities was a mandate that NNPC as a corporation would leave no stone unturned to actualise, and added that a timely delivery of the asset was a priority.

He added: "We will stick to time; we will deliver this project by 2022. We will commence actual rehabilitation work in January. We will do everything possible between October and December to close out all necessary conditions for us to deliver on that project.

"I believe that with the support that we have from the shareholders - government of this country - the entire staff of this company and the contractors, I believe it is doable and we will deliver the project."

He also tasked the contractors on the need to consider their reputation as the most critical element in business processes and engagements.

"For the original builders of the refinery, Tecnimont, Eni/NAOC and NNPC, let us be conscious of the fact that our reputation is at stake as far as this project is concerned", he added.

He noted that the NNPC leadership, "has promised this country that our refineries will work, therefore, we must work not to disappoint over 200 million Nigerian stakeholders."

Furthermore, Mele Kyari, also charged the management of the PHRC to ensure that indigenous engineers and other professionals working in the refinery would be fully engaged to participate actively during the rehabilitation exercise.

He said the involvement of indigenous workers would help build their capacities, save cost and introduce an era of steady and uninterrupted production curve that would grow the oil and gas industry of Nigeria.

Earlier, in his interaction with the officials of the facility, Mele Kyari again lamented the shame the poor state of the refineries were causing the nation.

According to him, the management was tired of telling stories and giving excuses about the refineries.

He, however, assured that the corporation would do everything required to ensure that the four refineries were fixed so that they start functioning at full capacity.

He also told the company's workers' union that the national oil firm remains committed to total rehabilitation of the facility, saying, the present state of the refineries has brought shame to the NNPC and the country.

"First and foremost, I am coming here for a single reason so that we have to get this refinery to work. It must work. So all of us, it is either we fix it or quench.

"If we don't fix it, we will all quench. And we have moved rightly from point of hope to hopelessness. Then will stop this, and the way to stop it is for all of us to work together to make sure that these refineries work.

"Without these family there will be no conversation with anybody. Government is not going to talk to anybody, they are tired of us. The owners of this family are tired of us. "They are tired of our stories. We keep telling them we will repair it, we will fix it, we will do turn around maintenance. Since I came here since 1991, I know that this is the same story -Turn around maintenance that will never work.

"The refineries have never worked at 90 per cent capacity since I joined the group. That is the truth. So we have to change this narrative. We need all of us to make it work. And my reasons of coming here is to see how far we are going with the work we are doing so that the real work must start in January.

"Whatever it takes we will get it to start in January. And I am here to confirm all the schedules that the COO has promised that has not been delivered of it.

"And I am not in doubt. I am just coming here to give you more confidence that we are behind you. We are aligning with you... to deliver on that single task of fixing these refineries," he added.

He again painted a reputation damaged done to the country on account of the state of the refineries, saying that the corporation cannot have a conversation anywhere without the issue of the refinery being raised.

"It is a shame on our country, on all of us. We cannot converse with anybody anywhere without raising the issue of our refineries. And I am not ashamed of saying it, in many places, even yesterday, I said all of them are down to lower capacity. That is the situation.

"And all of us will make it work, we will fix it. And my reason for coming here is to support the team. Continue what you are doing, deliver on our task, meet our schedules, and we are all lining behind you," Mele Kyari said.

But briefing the NNPC boss on the state of work being done on the first phase of the repair work, Tecnimont Project Manager, Mr. La Mattina Carmelo, said the inspection aspect of the project had progressed to 91 per cent while final report and Engineering Procurement Construction (EPC) proposal was at 75 per cent.

Carmelo added that his company would deliver the first phase of the rehabilitation within three weeks from now, noting that there were no challenges as the project was progressing efficiently and pledged to offer the best services to ensure a timely delivery.

Therefore, it is expected the efforts would help return the country's refineries to a state that would make them functional once more so as to transform Nigeria into a net exporter of petroleum products and help preserve foreign exchange reserves.

See What Everyone is Watching

More From: This Day

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.