‘$1.5bn P’Harcourt refinery rehabilitation a national disservice, wasteful spending’

Success Nwogu

A retired Deputy Director of the Department of Petroleum Resources, Engineer Sunday Adebayo Babalola, on Monday said the rehabilitation of the Port Harcourt Refinery Company at $1.5 billion is a national disservice and a wasteful spending.

The Nigerian National Petroleum Corporation, despite public outcry, had in April, 2021 signed a contract with an international company, Maire Tecnimont SpA, for the rehabilitation of the Port Harcourt Refinery Company, after the Federal Executive Council had approved the contract.

Sources said the project entailed engineering, procurement and construction (EPC) activities for a full rehabilitation of the Port Harcourt refinery complex, so as to restore the complex to a minimum of 90 per cent of its nameplate capacity.

It was learnt that the complex comprises two refineries of a total capacity of approximately 210,000 bpd (barrels per day).

The Minister of State for Petroleum, Timipre Sylva, said the project will be completed in three phases, the first within 18 months taking the refinery to 90 per cent production capacity, while the second carried out within 24 months and the final phase carried out within 44 months.

Nigeria has four refineries of a combined capacity of 445,000 barrels per day (bpd).

One of the refineries is in Kaduna State while three of the refineries are at Warri, Delta State and Port Harcourt, Rivers State; in the oil-rich Niger Delta region.

The Port Harcourt complex comprises two plants with a combined capacity of 210,000 bpd.

Babalola, who is also a former Acting Managing Director of Belemaoil Nigeria Limited and currently, Director of All Grace Energy, in an interview said the idea of rehabilitating the refineries was wrong.

He said, “The idea of even going to repair or turn around those refineries is totally wrong because over the years, turn around maintenance had been done and they never achieved anything.

Why are you going to do the same thing that you have tried in the past and it never worked?

You can not tell me that your government is different from other government.

The people operating under the other government are the same. Politicians are the same.

It is the same people that were in the other party that have moved to the new party and so their mindsets have not changed.

“Now spending such money on those refineries may not come out well.

The money they are about to spend on those refineries can build new refineries very well, both modular and non modular, depending on the capacity they are planning for.

Why would you spend such money on a refinery that is almost forty years old? To achieve what at the end?

If I have the opportunity, those refineries should be sold out either directly or indirectly.”

He also said government control of the generation of electricity in the country was responsible for the high electricity tariff.

He added that the price of premium motor spirit, popularly called petrol, should not be based on control.

Babalola said, “People will always cry out when there is price increment but it is the justification for the high price that is important.

Whether we like or not, people are paying more for electricity than those companies are charging.

When you buy diesel for your generator, you are paying for electricity.

“The tariffs of the electricity is not based on what they are charging us.

What about the time consumers do not put the electricity? The reality is that supply will dictate.

If they allow individuals to generate electricity and distribute them, you will see things will be better.

As long as government is in control of generation, we will still have the problem on how the tariff will be high.”

He added, “On the prices of petrol in Nigeria.
Subsidy is not the answer.

It is not different from giving money to individuals.

In subsidy we found, round tripping, people who will claim they imported but they did not import and so many unholy things that were done.

The reality is that market forces should control the pricing of commodities if we want to move forward.

The economy that is market driven is more efficient and more effective than one that is driven by control.

Lets put subside aside, what of the oil pricing? It will go up and down with international crude oil pricing.

That is a give out. But it should not be based on control by individuals.

“How can one say subsidy has been removed and the selling price is still being dictated, it won’t work. When telecommunications company came to Nigeria, nobody controlled the prices.

When they started it was N50 per minute but today you can make calls as low as N6 and N50 then is higher than N50 today because of the exchange rate.”