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Nigeria makes u-turn, to spend $3.5bn on refinery repair before sale

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Barely six months after the Minister of State Petroleum, Ibe Kachukwu, told the world that for efficiency in the upstream sector, Nigeria would hands off from the business of running any of its three refineries without input from the private sector.

But to achieve the expected result, government will spend a total of $3.5 billion on the three plants

Kachukwu told the House of Representatives Committee on Petroleum that the three refineries in Warri, Port Harcourt and Kaduna were no longer for immediate privatisation, because the Federal Government plans to put in place new measures aimed at revamping them before inviting the private sector.

But an expert on refineries, James Brimoh, quoted a recent technical report on the refineries, especially the Kaduna Petrochemical Refinery, by Primptrox Technical, a major contracting firm which contributed to the building of the refinery in 1980, as saying that it had advanced its technology away from what is in use by the refinery.

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The firm, which was said to have been contacted by past administrations in Nigeria for the turnaround maintenance of the refineries, had opted to replacing the main engine components with entirely new technology, which would amount to building a new refinery.

“To that effect, the country will be spending at least $1.5 billion to put the Kaduna refineries in order, while the Warri and Port Harcourt facilities will gulp about $2 Billion to return them to maximum production output.

“It was on this reality that made the Minister in June this year to announce to the world that rather than government spend such a huge sum in the midst of scarce resources, it would rather privatise the refineries to willing hands, in addition to licensing new ones,” he said.

Sources said powerful forces within the Presidency were in favour of spending any resources, despite the foot dragging approach to it by the ministry officials, who had earlier maintained that no money should be put on the plants.

Kachikwu said the government was working hard to bring in private investment capital to strengthen the plants, but added that the sale of the facilities in their present condition would amount to selling them as scrap.

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