TAM: Senate Constitutes Panel to Probe NNPCL Over N11.35trn Spent on Morribund Refineries in 13 Years

Sunday Aborisade in Abuja

The Senate on Tuesday constitued an ad hoc committee to investigate the Nigerian National Petroleum Corporation Limited (NNPCL) over the N11.35 trillion spent on the nation’s four morribund refineries in the last 13 years without results.

The Deputy President of the Senate, Jibrin Barau, announced the composition of the panel while presiding over the plenary.

The decision was taken after the red chamber deliberated extensively on a motion by Senator Sunday Karimi who is representing Kogi West.

Karimi’s motion is on the urgent need to investigate the various turnaround maintenance (TAM) projects of Nigerian Refineries in order to uncover waste and forestall further waste of scarce public resources. 

The red chamber asked the ad hoc vommittee to investigate all contracts awarded for the rehabilitation of all state-owned refineries.

It also asked the panel to ascertain progress on the ongoing works in all refineries in order to forestall waste and corruption.

It is also expected to interrogate the Federal Ministry of Petroleum Resources, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPCL and the  Bureau of Public Enterprises (BPE), on the best approach to commercializing and/or ensuring profitability of the state-owned refineries.

It also mandated the panel to invite the NNPCL, NUPRC and the Nigerian Liquefied Natural Gas (NLNG) to explain the nation’s preparation for Green Energy sources in line with the Paris Agreement on Climate Change 

The ad hoc committee was asked to conduct the  investigations in conjunction with the Senate Committee on Petroleum Resources (Downstream).

The Deputy Senate President said those who had taken money meant for the turnaround maintenance should be brought to book.

He named Senator Isah Jibrin as the chairman of the panel to work with chairmen of the Committees on Petroleum Resources (Downstream); Upstream; Gas; Finance; Appropriation, and Public Accounts, and submit the report within four weeks.

Karimi while moving his motion said state-owned refineries in Nigeria have been a serious drain pipe of public finance, depriving the citizens of the joy of being an oil producing nation. 

He said: “Between 2010 to date, Nigeria is estimated to have spent N11.35 trillion (N11,349,583,186,313.40) excluding other costs in other currencies, which include $592,976,050.00, €4,877,068.47 and £3,455,656.93, on renovation of refineries, yet they are unproductive.

“The Federal Government of Nigeria has spent over N6 trillion between 2010 and 2023 on fuel subsidy due to Nigeria’s low refining capacity and has spent almost twice the amount on rehabilitating (turnaround maintenance) projects its refineries in Port Harcourt, Kaduna and Warri between 2010 and 2022. 

“Despite the moribund state of the four refineries, the operating costs of the refineries between 2010 and 2020 is estimated at N4.8 trillion.

“The refineries are estimated to make a cumulative loss of N1.64 trillion, within four years.

“The Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven  years from 2013-2019 at an estimated cost of N12,161,237,811.61 only.

“In addition, on the 18th March 2021, a rehabilitation contract was executed between NNPC/PHRC and Tenenimont SPA at a lump sum of $1,397,000,000.00 only (about N75 billion amidst global public criticism).

“The Phase 1 of the project is expected to be completed in 28 months after the contract, Phase 2 within 24 months and Phase 3 within 44 months of execution. Despite this, the Port Harcourt Refinery remains a money pit. Going by projections and representations from NNPCL, the renovation works ought to be completed and operations of the refinery commenced by June 2023.

“In a bid to revitalize the Warri Refinery, the Federal Government has injected huge public funds into revamping Warri Refinery & Petrochemical Company Limited to the tune of over N28,219,110,067.10 between 2014 and 2019.

“That particularly, around the 24 June 2022, the Federal Executive Council awarded maintenance services for quick fix repairs of Warri Refinery to Daewoo Engineering and Construction Limited at $497,328,500.00, yet at the moment the Warri Refinery is inactive. 

“This is different from the 2017 contract award to Saipem Contracting Nigeria Limited for Tech Plant Survey of the Warri and Kaduna Refineries at €2,025,000.32.

“The Kaduna Refinery and Petro-Chemical Company (KRPC) has over the past 10 years gulped N2,266,248,434.00 in the name of rehabilitation, yet the refinery remains unproductive. 

“The Nigerian National Petroleum Company Limited (NNPCL) approved a $741 million renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna Refinery in February 2023 and it is intended to restore the refinery to production of 110,000 barrels of petrol per day (at least 60 per cent capacity) by early 2024.

“If a thorough investigation of the past and current rehabilitation project is not undertaken by the Senate, the circle of awarding unproductive turnaround maintenance contracts may not abate, thereby retaining the status quo where rehabilitation contracts have become conduit pipes for siphoning pubic funds whilst Nigerian citizens continue groaning over the high cost of petroleum products due to the moribund situation of the state-owned refineries, even as the world gravitates towards Green/Clean Energy Sources.”

In their various contributions, senators condemned those who ripped the nation of its scarce resources and vowed to bring them to book