Minister of State for Petroleum Resources, Timipri Sylva, has explained why President Muhammadu Buhari is starting his administration’s refineries rehabilitation programme with those of Port Harcourt, Rivers State.
Sylva who said plans have reached an advanced stage to rehabilitate refineries in the country, disclosed that the Buhari administration decided to start the rehabilitation programme from the two refineries in Port Harcourt because Rivers is the headquarters of the hydrocarbon industry in Nigeria.
Nigeria last September announced that it was set to commence the rehabilitation of four oil refineries in Port Harcourt, Warri and Kaduna in January this year.
Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, then said that the state oil corporation was determined to ensure the refineries achieve optimum refining capacity by 2022.
“The aim of repairing the refineries is to restore the country’s refining capacity. We are doing everything possible between October and December this year to close out all necessary conditions for us to deliver on the project”, Kyari said last year.
Nigeria is the largest oil and gas producer in Africa. Crude oil from the Niger Delta basin comes in two types: Light, and comparatively heavy the lighter around 36 gravity and the heavier, 20–25 gravity. Both types are paraffinic and low in sulfur.
However, the four refineries have a combined capacity to refine 445,000 barrels per day of crude oil. In the last 15–20 years, they had a poor operating record with average capacity utilisation hovering between 15 and 25% per annum.
As a result, 70–80% of the national petroleum products demand is met through import. As at 2017, the aggregate demand of petroleum products in Nigeria was equivalent to 750,000 bpsd.
The four refineries
The first refinery in Port Harcourt was commissioned in 1965 to process 60,000 barrels of oil per stream day (bpsd), as well as the second plant commissioned in 1989, which has a capacity of 150,000 bpsd.
Both refineries have a combined capacity of 210,000 barrels per stream day making it the biggest oil refining company in Nigeria.
Both had the last Turn Around Maintenance (TAM) in 2000. A Memorandum of Understanding (MoU) was signed between Italian oil major, Eni and NNPC which committed to the refurbishment of the both Port Harcourt Refineries
Rehabilitation works are being done in two phases, with both the Eni and the original participating in the process. At the end of the first phase, the Port Harcourt refinery is projected to reach 60% capacity utilisation, increasing to a minimum of 90%.
The decision to construct the third NNPC refinery in Kaduna was taken in 1974 along with that of the second NNPC refinery located at Warri. It was designed for a capacity of 60,000 BPSD but modified to produce 100,000 BPSD.
Kaduna proved to be a central location for distributing petroleum products to depots in the northern zone, as the Warri and Port Harcourt refineries proved for the supply of petroleum products to depots in the southern and middle belt zones.
Before now, NNPC had said that the rehabilitation of the two Port Harcourt refineries were still ongoing.
Group General Manager of NNPC Group Public Affair Division, Ndu Ughamadu, the disclosed this told the News Agency of Nigeria so in Abuja.
NAN reports that both refineries have a combined capacity of 210,000 barrels per stream day making it the biggest oil refining company in Nigeria.
Ughamadu said that the rehabilitation was part of government’s effort to get the refinery working, adding that the consultant and the contractors engaged by the NNPC were still on ground working.
While the minister announced that a third refinery will be built to bring the number of refineries in Rivers to three, he commended Governor Nyesom Wike for being persistent in his quest to get the Refinery Road dualised and promised that the Petroleum Resources Ministry will support the move.
Wike told Sylva that contrary to widespread fears, the Niger Delta is safe for companies to conduct their businesses, and accordingly dismissed multinational companies who use insecurity to justify their refusal to relocate their operational headquarters to the Roil region.
Governor Wike was speaking when Sylva and the management of NNPC called on him at Government House, Port Harcourt.
The governor wondered why insecurity does not prevent the drilling of oil but could be used to deprive the state what is due to it. “They use insecurity issues to place us in a disadvantaged position and deny us our right.
“There is insecurity in Lagos, Kaduna and Katsina States. Yet, companies do not run away from those states. The railway projects are not stalled too. The multinationals are sometimes to blame because they instigate insecurity by paying militants and turn around to blame it on the people.
“There is no excuse to operate outside our state. The Federal Government should compel them to relocate their headquarters to the state as the hub of the hydrocarbon industry’’, Governor Wike said, noting that NNPC has not done anything substantial for Rivers after many years of operation.
“The Port Harcourt Refinery has continued to operate below-installed capacity. Even the access road has been in a poor state for years. I urge you as minister and members of the board of directors to dualise the three kilometres road and change the narrative”, he adds.
While noting the patriotism Sylva has demonstrated by attracting federal projects to his home state, Bayelsa, Governor Wike urged other ministers from the oil region to emulate Sylva.
He said even if the minister is of the opposition party in Bayelsa, his sense of patriotism has made him place the interest of the state above partisan interests.
