NNPC Limited has indicated that it will outsource the running of its refineries once they complete their restoration. This was disclosed by the Group Chief Executive Officer of the company, Mele Kyari in Abuja on Tuesday.
In a press briefing held at the State House, Kyari explained that after the ongoing rehabilitation of the refineries owned by the NNPC, the national oil company will outsource their operations and management.
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He said the outsourcing of the refineries was part of the conditions given by lenders who are financing the rehabilitation of the refineries before the loan was given.
In his words, Mele Kyari said;
“We will get the refineries back and run it as a business, we borrowed money to fix it and repayment for loans obtained is tied against the productivity of the refineries.
“Our lenders have said except you decide through a transparent process to put in place an O and M contractors otherwise we can’t lend you money.
“As we complete work on them, we will hand over to OM contractors both for Kaduna and Port Harcourt refineries. We think this is the right thing to do, many companies get OM contractors to do this around the world.”
Based on the expectations that it’s refineries would be back on stream in 2023 and with Dangote Refinery set to commence operations in the same year, Kyari said Nigeria will end the importation of petrol by the middle of next year.
NNPC Ltd’s has 20 percent stake in the Dangote refinery, which the CEO says gives it a right of first refusal to supply crude to the refinery, providing the company with a competitive edge in selling its crude and extracting value from refined petrol.
NNPC has four refineries, currently being run by 3 subsidiaries;
- Port Harcourt Refining Company Limited (PHRC) with an installed oil refining capacity of 210,000 Barrel Per Stream Day. PHRC comprises of two refineries, the old refinery with a capacity of 60,000 bpsd, and the new refinery with installed capacity of 150,000 bspd.
- Warri Refinery & Petrochemical Company Limited (WRPC) with an installed oil refining capacity of 125,000 Barrels Per Stream Day. WRPC also have a petrochemical plant, that uses propylene rich feed to produce polypropylene pellets.
- Kaduna Refinery & Petrochemical Company Limited (KRPC) with an installed oil refining capacity of 110,000 Barrels Per Stream Day. KRPC also have a petrochemical plant; a 30,000 MT/yr Linear Alkyl Benzene Plant.
The NNPC had in 2021 secured the Federal Executive Council’s approval to rehabilitate the Warri and Kaduna refineries at a cost of $1.5bn ($897,678,800 for the Warri and $586, 902,256 for Kaduna) contract awarded to Italian company, Saipem.
The Port Harcourt refineries also got a $1.5bn contract awarded to another Italian firm, Maire Tecnimont SPA to fully overhaul it.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
