Despite inability to run refineries profitably, NNPC bids for Nigeria’s power plants

The Nigerian National Petroleum Corporation (NNPC) Limited has shown interest in purchasing Nigerian power plant facilities, which would allow it to expand its oil mandate to include electricity provision.

Should the purchase scale through, NNPC would now have refineries and also power plants under its management.

Ibeh Uzoma Chidi, Head of the public communications Bureau of Public Enterprises (BPE) confirmed NNPC’s interest in acquiring some Nigeria Integrated Power Plants (NIPPs).

According to him, the power plants were part of assets put up for sale by the federal government.

He revealed that Mele Kyari, managing director of NNPC has already made the intention known to BPE and the National Council on Privatisation (NCP) would be notified.

Chidi however added that Alex Okoh, director general, BPE, promised to provide a level playing ground for NNPC and other bidders for the NIPP plants.

The statement added that Kyari said the company had the required expertise and experience to be an active participant in Nigeria’s power sector.

“As an oil company and enabler organisation, NNPCL was determined to boost power generation and supply to Nigerian homes through increased investment hence it had signed a contract with China Machinery Engineering Company (CME) and General Electric (GE) to provide 50 megawatts of electricity to Maiduguri, Borno State,” the statement quoted Kyari as saying.

He added that the management of NNPC is determined to run the organisation efficiently and profitably for the benefit of the shareholders.

Eyebrows raised

The intention of NNPC has raised some eyebrows among Nigerians who questioned why NNPC cannot focus on getting oil refineries to work.

Read also: NNPC reportedly blocks Seplat $1.28bn deal with US ExxonMobil

John Obu an energy expert noted that while it looks like a noble move given NNPC now operates as a private entity, adding power plants under its management was a misplaced priority.

“Today, I bought petrol at N300 per litre, and someone is forgetting why we are suffering as Nigerians and add another critical sector.”

Teliat Suliamon an accountant also shared a similar view to Obu, calling on NNPC to focus on fixing its refineries.

NNPC refineries generate zero revenue

NNPC has four refineries located in Port Harcourt, Kaduna and Warri with a combined capacity to refine 445,000 barrels of crude oil per day,

The refineries have not only stayed idle but continued to record losses.

In NNPCs audited financial statements for 2020 the refineries suffered a combined loss of N108.29bn in 2020, and also N162.22bn in 2019.

In 2021, despite 100 percent reliance on importation, NNPC said it spent a total of N100 billion or N8.3 billion monthly in rehabilitating the refineries.

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