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FG won't sell refineries: NNPC boss, Kachikwu

By The Rainbow
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The Federal Government has ruled out divesting its interest in the nation's refineries with the Nigerian National Petroleum Corporation, saying emphatically that the facilities are not for sale.

The Group Managing Director of the NNPC, Dr. Ibe Kachikwu, who made clear government’s inclination on Wednesday, whoever laid plans of how the government wants to handle the facilities.

According to him, the joint venture partners with established track records of success in refining would be invited to support the running of the refineries to make them more efficient.

Kachikwu, who spoke at  an official tour of the Okrika Jetty and the Port Harcourt Refining Company Limited, PHRC, in Rivers State, on Wednesday, said the corporation plans to  un-bundle the Pipelines and Products Marketing Company Ltd, PPMC, into three companies.

Federal Government during the tenure of former President Olusegun Obasanjo had sold the two Port Harcourt refineries to a consortium led by billionaire business man for $750 million, but the deal was subsequently undone by the succeeding administration under late Umaru Musa Yar’Adua.

Expert opinions had favoured the outright sale of the four  refineries which a combined capacity of 445,000 bpd to stem the monumental waste of resources.

Humongous sums had been  wasted by successive governments on turnaround maintenance of the refineries operations. For instance, the late Gen. Sani Abacha, was said to have awarded a major contract of $215 million in 1997 for the Kaduna Refinery, while the Abdulsalami Abubakar administration in 1998 set aside about $92 million for the refineries. Obasanjo, between 1999 and 2003, also awarded contracts estimated at between $254 million and $400.4 million for the rehabilitation of the refineries and pipelines while in 2007, another $54 million went into the TAM for Kaduna refinery alone.

Again, former President Goodluck Jonathan commenced a $1.6 billion phased TAM, scheduled to begin in January 2013 and ending October 2014, but which commenced in October 2014 and now rescheduled to end in March 2016.

Managing Director, PHRC, Dr. Bafred Audu Enjugu, disclosed that the ongoing phased rehabilitation of the refinery cost a little less than $10 million, adding that the job was holistically carried out by indigenous engineers without any foreign support.

Kachikwu noted that the ongoing phased rehabilitation of all the state owned refineries would be given an accelerated vigour with the aim of reducing petroleum products importation.

He added that at full capacity, all the refineries could supply only 20 million litres of premium motor spirit otherwise known as petrol on a daily basis.

The managing director also said the marketing subsidiary of the NNPC was being split into three to ensure lean, efficient and profitable operations.

According to him,  the split would be along the lines of a pipelines company that would focus primarily on the maintenance of the over 5000 kilometers pipelines of the Corporation; a storage company that would maintain all the over 23 depots, and; a products marketing company that would market and sell petroleum products.

He added that efforts are in top gear to fix all the crude and petroleum products pipelines in the country.

He disclosed that the military will also be enlisted in the protection of the pipelines, with the Nigerian Air Force to providing aerial survey, the Nigerian Army Engineering Corps fixing damages, while the Police and the Nigerian Navy will provide marine surveillance for the network of pipelines.

He said the move will ensure that the right sets of skills are rightly positioned and the numbers of leakages in terms of pipeline breaks and products losses are reduced to the barest minimum.

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