NNPC needs $500m to repair refineries –Kachikwu

The country may still need to depend on importation of fuel products for some time as the Federal Government would need about $500m to put the nation’s refineries, which have been shut down, back to functionality.
This was the submission of the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu, at a forum on Saturday organised by the Petroleum Club Lagos to celebrate his recent appointment as the NNPC GMD.
Kachikwu said the Port Harcourt Refinery, which was refining crude some weeks ago had stopped working, and had since been shut down.
He said, “I was initially happy with the progress made at the Port Harcourt Refinery when it operated at 60 per cent capacity some weeks ago. But now, the capacity has dropped so low that we had to shut it down. We will need about $500m to fix them.”
He admitted that importation of petroleum products was not the solution to Nigeria’s problem, stressing that attention should be shifted from Nigerians wanting to get allocations for product importation to seeking ways to adding value to the system.
He said the NNPC had not dropped the idea of conducting forensic audit on its account books.
According to Kachikwu, the NNPC is currently talking with states to see how they can contribute towards driving the modular refining model.
The NNPC chief said the decision to seek repayable fund is in line with the transformation of the NNPC to become an autonomous business venture.
The $500 million, Kachikwu said, will bring the refineries back on course to give the required capacity output, adding that the funds would be repaid over the next seven to nine years.
He said two of the refineries would be shut down for eight to nine months for quick repairs, while the remaining, which are better in shape would be used to supplement imports. They would be shut down after the other two are back on stream.

Read also: NNPC cancels OPA bids, adopts direct sales

To turn NNPC from its current loss to profit position, Kachikwu said next year will be the most challenging in the transition and transformation programme of NNPC and the oil industry. “From 2016, we (NNPC) will have a budget and work within the budget. There will be no arbitrary deductions from the corporation’s revenues because it belongs to the government. Other important projects and activities not covered by the budget, the corporation will seek external funds like any other company, which it will repay. We have made our books open and transparent. Our accounts will be audited, and financial organizations that lend would be able to know the state of the company and basis for which they will lend,” he said.
The NNPC chief also said the Pipeline and Product Marketing Company (PPMC), an arm of the Corporation, is his worst headache. According to him, 85 per cent of NNPC losses come from PPMC because of vandalism, community issues and connivance of some of the staff with the perpetrators of the crime.
To check the development, Kachikwu said he has moved the depot managers in PPMC, and has stopped pumping of products in the night. He said products are now pumped during the day.

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now