achikwu, Tinubu clashed at the Senate over the Concession of P/Harcourt Refinery
The Senate on Thursday conducted a public hearing on the alleged concessioning of the 210,000 barrels per day (bpd) Port Harcourt Refinery to oil firms – Nigeria Agip Oil Company (NAOC) and Oando Plc – citing lack of openness and transparency in the exercise.
The public hearing was a follow up to the decision of the Senate on Tuesday, May 30, 2017 where the parliament's committee on the planned Concession of Port Harcourt Refinery to AGIP/ EZI and OANDO Plc was constituted to carry out holistic investigation to determine how the deal was sealed and the criteria used to select AGIP/ENI and OANDO Plc. The probe was carried out by seven-member Ad- hoc Committee with Senator Abubakar Kyari, APC, Borno North, as Chairman, Senator Benjamin Uwajumogwu, APC, Imo North, Vice Chairman, while Senators Dino Melaye, APC, Kogi West; Duro Faseyi, PDP, Ekiti North; Sabo Mohammed, APC, Jigawa South; Abdul' Azeez, APC, Adamawa Central, and Matthew Urhoghide, PDP, Edo South as members.
The resolution of the Senate to put in place the committee was sequel to a motion by Senator Sabo Mohammed, APC, Jigawa South and entitled, “Non-transparent transactions relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources, just as the Senate passed a resolution that the concessioning process be stopped. Invited to the public hearing were the Secretary to the Government of the Federation, SGF; Minister of State, Petroleum; Nigerian National Petroleum Corporation, NNPC; Department of Petroleum Resources; DPR; Bureau of Public Enterprises, BPE; Infrastructure Concession Regulatory Commission, ICRC; Nigeria Labour Congress, NLC; Trade Union Congress, TUC; PENGASSAN; NUPENG; OANDO Plc; AGIP/ENI, among others. To set the stage for the probe, Senate President Bukola Saraki said it was pertinent to do things in the right manner in order not to send wrong signals to investors and international development partners. Saraki, who was represented by Senator Barnabas Gemade, said, “ Taking cognizance of the prevailing economic situation, it is important we do things in the right manner in order not to send wrong signals to investors and international development partners. As a country, for us to move forward, we should and be seen to be doing right things in line with the change agenda of the present government”.
Meanwhile, the Minister of State for Petroleum Resources, Ibe Kachukwu, and the Group Chief Executive of Oando PLC, Mr. Wale Tinubu, clashed over the concessioning. The Minister dismissed the statement credited to the Oando boss which implied that his company had won the concessioning of the Port Harcourt Refinery. Though Tinubu denied ever making any remark in the media on the alleged concessioning, the Petroleum Minister accused him of jumping the gun even by his submission that the refinery had been packaged for OANDO'S rehabilitation. At the public hearing, strong indications emerged that the concessioning of the refinery was enmeshed in confusion as Kachikwu denied the alleged concessioning plan, just as he said that a technical committee set up by the government to undertake the review was coming up with a holistic investment figure enough to fix all the nation's refineries. The Minister vehemently denied making all remarks credited to him on the alleged concessioning as reported by some dailies.
The Minister insisted there was no plan to concession, privatise or sell the Port-Harcourt Refinery, for which an estimated $300 million would be required to repair. He said it was better to engage the company that built the refinery in the first instance for its repair, due to the availability of spare parts and knowledge of the configuration, adding that the country's refineries were being maintained by Nigerian engineers, and acknowledged that there was the urgent need for constant retraining of the engineers. After accusations and counter-accusations between the Senate and the federal agencies handling the nation's refineries on the alleged move to concession the Port Harcourt Refinery, both parties settled for revamping, rehabilitation and maintenance of the facility along with others through what they termed, sourced financing from private oil firms. According to the Senate and the Federal Government, revamping the Port Harcourt Refinery was the way to go as against the plan for concessioning.
The Petroleum Minister, in his submission, explained that the story of the alleged concessioning of the refinery must have emanated from concerted efforts being made by his Ministry and the NNPC to revamp all the refineries and not that of Port Harcourt alone. Kachikwu also faulted publications quoting him as speaking about a plan to concession the refinery, even as he denied making any statements that indicated that government would privatize or sell the Port Harcourt Refinery, or other state owned refineries. According to him, what is in the pipeline for all the refineries was an arrangement where private investors would bring in money for their repairs to optimal capacities which will bring about expected incremental volume in production and the investors money recouped. “The planned arrangement is the only viable alternative for the Federal Government as far as repair work on the refineries are concerned since the turn around maintenance carried out over the years has failed”, he said.
Tinubu, while speaking at the Nigerian Stock Exchange in Lagos on May 11,2017, had been quoted as disclosing that his company entered into a Memorandum of Understanding, MoU, with the Federal Government to manage the Port-Harcourt Refinery under a repair, operate and maintain arrangement, adding, “We also got approval from the President to repair, operate and maintain the Port Harcourt Refinery together with our partner, Agip. We plan to increase the refinery's capacity from 30 per cent to 100 per cent, subsequently to 120 per cent.” But at the public hearing, the Group Chief Executive of Oando said: “There was as concession, no privatisation and no sale of any assets. All that is happening is that responsible corporate bodies, responsible individuals and government were trying to find a solution to the perennial disgrace of exporting our crude and importing petroleum products. Only three countries in the world import petroleum products: Iran, Iraq and Nigeria. “Nigeria exports copious amounts of crude and still imports petroleum products. This a national disgrace that we need to find solutions to as quickly as possible.”
He, however, enjoined all stakeholders to collaborate effectively to finding solutions through private channels in fixing the refineries just as he said Oando had been investing in infrastructure in the country. The hearing was also an opportunity for the Bureau of Public Enterprises, BPE, to open up on the concessioning process against the backdrop, that from the beginning, it was alleged that government refused to carry along the BPE which ought to be in the main stream of the entire concessioning arrangement. In his presentation at the hearing, the Director- General, the National Council on Privatisation, Alex Okoh, who kicked against the planned concessioning of Port-Harcourt Refinery, said that it would amount to illegality.
Also, NUPENG and PENGASSAN kicked against the move to concession the refinery, describing Oando and Agip as anti-union. The chairman of the committee, Senator Abubakar Kyari, in his remarks, said that by whatever name called, facts emerged at the session that the arrangements being made for the repair of the refineries were not open to all stakeholders in the oil industry and not in line with laid down procedure. He therefore admonished the Minister and other policy makers in the industry to ensure that the planned arrangement for revamping, rehabilitation and maintenance of refineries should followed due process.