Nigeria: Why Nigerian Refineries Crashed - Ex-NNPC Group Director

7 December 2023

He faulted the federal government's rehabilitation of the Port Harcourt Refinery.

A former Group Executive Director of the Nigerian National Petroleum Corporation (NNPC), Alex Ogedengbe, said Nigerian refineries crashed because funds budgeted for maintenance and operations were not released.

Mr Ogedengbe, an engineer and a former managing director of Kaduna and Port Harcourt Refineries, spoke when he appeared as a guest on Channel TV's Sunrise Daily on Tuesday.

The former NNPC director said even when funds were released, it would be late and inadequate to carry out maintenance works on the refineries.

''The three refineries -- Warri, Kaduna and Port Harcourt Refineries -- were built according to international standards. They were all tested for completion and performed at the time they were completed.

''They ran according to the design for many years. However, being government-owned facilities, not private ones, they were not run commercially. That's money did not come on time for maintenance. Not enough actually was given for the maintenance project,'' he said.

''So, they were just declining slowly because of lack of maintenance until they crashed - all of them crashed by 2018,'' Mr Ogedengbe added.

When one of the programme anchors asked him if he meant that monies were budgeted for maintenance of the refineries but were not released in all cases, he responded: ''Correct! You just summarised it for me. When I was the MD of Kaduna and Port Harcourt Refineries, we would budget to the (NNPC) corporate headquarters. (But) every month, we would receive between 50 and 60 per cent of our budget. We were supposed to make up the rest somehow.''

Asked who should be held responsible for the non-release of the budgeted maintenance funds, Mr Ogedengbe replied, ''Corporate headquarters of the NNPC. (This is) because all the refineries were subsidiaries of the NNPC corporate and the corporate headquarters release monies there.''

'Rehabilitation of old refinery not proper'

The Nigerian government recently resumed the rehabilitation of the three refineries.

The country's Minister of State for Petroleum, Heineken Lokpobiri, raised the hopes of many Nigerians when he said the Port Harcourt Refinery would be ready by the end of 2023.

But Mr Ogedengbe faulted the rehabilitation of the Port Harcourt Refinery saying the Nigerian government ought to have built a new refinery which has new technology.

''Why is this old refinery being rehabilitated instead of building a new one? The Port Harcourt Refinery being rehabilitated by the federal government is an old refinery built in 1965 with different old technology,'' he said.

Mr Ogedengbe also expressed doubt that the Port Harcourt Refinery would be ready by the end of the year.

''If what I heard from that short, nine-minute release by the MD of the refinery is anything to go by, at best they will have some kind of mechanical completion by the end of December.

''The old refinery that is being repaired now, cannot produce more than 25 per cent maximum of crude oil. In other words, one barrel of crude will produce a maximum of 25 per cent of petrol. Whereas, the newer Port Harcourt refinery which is next door to the old one they are repairing can produce up to 48 per cent or 50 per cent of crude oil,'' he stated.

''So, overall, I don't expect any appreciable contribution. That is even if all the systems work. I don't have confidence in that right now from what I've seen.''

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