Reps to investigate, audit $1.5 billion PH Refinery rehabilitation

Tom Okpe, Abuja

The House of Representatives has mandated its House Committee on Petroleum Resources Downstream to carry out an investigative hearing and conduct a comprehensive audit of funds previously spent on the Rehabilitation/Repairs and Maintenance of the Port-Harcourt Refinery and others, in the country.

The order was issued on Wednesday plenary where order 8, Rule 4 was read by Onofiok Akpan Luke, PDP, representing Etinan/Nsit Ibom/Nsit Ubiom, Akwa-Ibom State on a motion on the need to ensure transparency and accountability in the rehabilitation exercise of the nation’s refineries.

The motion reads: “The recent news of the approval of the Sum of $1.5 billion, about N575 billion, for immediate commencement of rehabilitation work on the 32-year-old Port Harcourt Refinery phased at an estimated completion period of 44 months (approximately – 4 Years) with three components funding from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions, and Afreximbank.

“The Port Harcourt Refineries located in Alesa Eleme southeast of Port Harcourt, operates two oil refineries, including an old plant commissioned in 1965 that can process 60,000 barrels (9,500 m3) per stream day, as well as the new plant commissioned in 1989, which has a capacity of 150,000 barrels (24,000 m3) per stream day.

“Concerned that NNPC had allegedly spent about $25 billion in turnaround maintenance of refineries in the past 25 years, this latest prevailing development is coming after promises by the current administration that government would no longer spend on the facility.

“Previous rehabilitation notwithstanding, the Nigerian National Petroleum Corporation (NNPC) audit report had last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details. Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses.

“The three refineries processed no crude because of the rehabilitation works being carried out on them, therefore, there was no associated crude plus freight cost for the three refineries since there was no production but operational expenses that amounted to ₦10.27 billion. This resulted in an operating deficit of ₦10.23 billion by the refineries.”

The Law Maker felt concerned that, in July 2017 major structural construction began on Dangote 650,000 BPD Refineries with partial refining capability likely in 2022. The same lag period that Rehabilitation would be carried out on the 210,000 BPD Port Harcourt Refineries.

He further stressed: “Deeply worried by the public uproar on this latest initiatives, the voice of the National Assembly must be recorded to ensure judicious use of the proposed $1,5b Dollars considering facts that the facility has failed to perform after years of rehabilitation/repair/maintenance.”

The House also mandates its Committee to examine the Performance Bond, Assurance, Warrantees and Guarantees put in place for Operating and Maintaining the Plants after Commissioning and report to the House for further Legislative Action, within 6 Weeks.

Also, urge the Federal Government to grant license and provide incentives for the building and construction of Modular Refineries.