The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who is also the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), has stated that foreign investors are not going to run the refineries in the country, but to provide funds and technical support.
He declared that he would never give up, in the discharge of his duties, while urging Nigerians to give change the opportunity to work, while assuring that the refineries in Nigeria would not be sold.
Kachikwu also apologised again to Nigerians on fuel scarcity, saying it had started easing off in Abuja, Lagos and some other
He confirmed that Port Harcourt and Warri refineries had started refining, while Kaduna refinery had been receiving crude oil and would be back in production (refining), within one week to ten days.
The petroleum minister gave this hint on Saturday at the Port Harcourt Refining Company Limited (PHRC) in Rivers State, a subsidiary of the NNPC, shortly after re-commissioning of the crude line of the PHRC.
He also hinted that the refineries currently had capacity of 12 million litres of refined petroleum products per day, but could go up to 20 million litres per day, when all the refineries would be working optimally, but he put the national total consumption at 45 million litres of petroleum products per day.
Kachikwu said: “We are not inviting foreign partners to take over the refineries. We do not have the funds. Even now that they are working, they are probably working at about 60 per cent or less below capacity. We need to upgrade the refineries and get them to a level where they will be at least 90 per cent performance, which requires money. Total investment for that is in the excess of $700 million and we do not have it. Let us be honest about it.
“What we have now done is to find a very creative way of bringing in investors, who will work with our teams who have skills, reactivate and operate the facilities in these refineries and help us to provide technical support and they will be paid through the flow out of the refined products, over a period of time, while we have also changed the refining model, in such a way that refineries pay for their crude into the federation account, whatever they produce will be sold to the PPMC and the marketers themselves, for which we should be praised actually.
“The feat recorded will not end fuel importation. Even if the refineries are working at 100 per cent installed capacity, they will provide only 20 million litres daily. Our daily consumption is about 45 million litres. If the three refineries are now functioning, we will have about 12 million litres, far below the 45 million litres. The advantage they bring is distribution.
From Port Harcourt refinery, we can distribute to the East. From the Warri refinery, you can distribute to the West. From the
Kaduna refinery in the North, you can distribute to the farther areas of the North.
“We are looking at models, whereby majors that cannot import because of foreign exchange issue, we are sorting that out in a
way. So that they can now begin to take responsibility for their own business. So far, PPMC is taking responsibility for everybody else’s business and we do not have that kind of capacity.
“It does not solve the problem completely, but two things will happen. When the upgrade and repairs, led by the foreign investors, with our joint team, are concluded, our capacity will move from about 50 per cent to about 90 per cent, resulting in movement from 12 million to slightly excess of 20 million litres production per day. The co-located refineries that we have also advertised, which will be private sector-led, by the time they are attained in about two years, there will be excess of 750,000 barrels refined petroleum production capacity per day. Our hope is that by 2018, fuel importation will be reduced by at least 60 per cent, because of the upgrade that would have taken place. By 2019, when the co-located refineries are in place, we will actually be exiting importation and begin to export refined petroleum products. That is the strategic way. That is what we are working on.”
RipplesNigeria …without borders, without fears
Latest posts by Ripples Nigeria (see all)
- Covid–19, leadership and the presidency - April 1, 2020
- America surges past China in Coronavirus death toll - April 1, 2020
- ASO ROCK WATCH: Coronavirus takes seat in the Presidency. 2 other talking points - April 1, 2020