SENATE TACKLES PIPELINES VANDALISM, CRUDE OIL THEFT
Nothing prepared the Senate Committee on Petroleum Resources (Downstream) for the drama that would ensue in the course of its oversight of the Petroleum Training Institute (PTI), Effurun, Warri. The oversight tour actually started on a calm note with top management of the Institute, led by Mrs. Nnena Clara Dennar, seated in the boardroom, ready to bare their minds on the challenges facing the nation's foremost training agency for middle level manpower for the oil and gas industry.
In her opening remarks, Mrs. Dennar pleaded with the committee to help incorporate the PTI in the proposed Petroleum Industry Bill (PTI), adding that its non-inclusion in the last version was a major challenge for the institute.
She also told the Senator Magnus Abe-led committee that the Institute was facing some challenges, including ageing facilities, which 'is having a negative impact on the training functions of the institute.'
In an attempt to address this, the Federal Government directed the Petroleum Technology Development Fund (PTDF) to carry out a comprehensive upgrade of PTI facilities to international standards 'To this end, the projects which are carried out in phases are at different stages of completion', she said.
What Mrs. Dennar, however, didn't tell the committee was that most of those projects were already more than five years in the works, with completion nowhere in sight.
Because seeing is believing, Senator Abe asked her to show the committee the facilities. That was when the drama began. First was the administrative block on which work has started at least five years ago. There were no signs of workmen anywhere in sight. As the committee members moved on from there, Vice Chairman of the committee, Senator Danjuma Goje asked for the engineer supervising the projects. He was nowhere near the sight . Mrs. Dennar asked that he be summoned.
After a while, Engineer Adebisi Ashimi, who admitted to being the lead consultant on all the projects in PTI surfaced. He, however, appeared very reluctant to volunteer information to the committee; apparently because he was unaware of the status of the men to whom he was summoned.
Although he initially refused to talk, insisting that he couldn't do so because he had no documents with him and besides, he was not told that the team needed his attention. He had no choice after an angry Senator Abe reminded him that his intransigence was unacceptable. Thereafter, Ashimi opened up to the committee. He explained that he leads five other engineering consultants on the building projects in the PTI which are worth over N20 billion. The projects have been on-going since 2007, he further noted.
The projects, which include two students hostels, administrative/office blocks, call duty quarters, a printing press, water works, generators and staff club, are part of the comprehensive measures being taken by the Federal Government, through the PTDF to upgrade PTI, a middle-level manpower training centre for the oil and gas industry, to international standard.
An enraged Senator Goje, who forced Ashimi to give details of the projects, abandoned and on-going, thereafter declared: 'We need to see your principals and the exact number of projects for us to know why this place, that's critical to the nation's economy, has been abandoned. 'N20 billion is not small money. With that kind of money, this place should be a construction site but we can't even go ahead to inspect any project now…This is a terrible thing; it's a pity…'
From there, the team moved to the Warri Refining and Petrochemical Company (WRPC) where for the first time, there was cheery news. On tour of the nation's refineries, the WRPC offered a ray of hope that management of indigenous refineries can still get it right and get the plants functional in such state as to produce enough petroleum products for local consumption. On hand to receive the Senate team was Engineer Sam Babatunde, who stood in for the WRPC Managing Director who was on leave.
In his presentation, Babatunde, who also doubles as the Executive Director ( Operations) said the original builder of the Warri Refinery, Saipem has been selected as the contractor to handle the
Turn Around Maintenance (TAM). The TAM would cost the nation $600 million, (about N94.2 billion) which is expected to last between 24 to 36 months with an upgrade for long term operative plan of 50 years.
'The $600 million figure is not sacrosanct; it's a rough estimate. It's just an estimated value,' adding that there is a 'two to three year programme to rehabilitate all the refineries in the country.'
Major challenges confronting the WRPC, said Babatunde, include destruction of its pipelines, incessant crude oil theft meant for the plant from Escravos and rampant kidnappings of the plant's top management.
'We are victims of pipeline vandalisation and disruptions…There is a running battle to keep our plants running at even 25 per cent; it's a directive from Abuja.
'Just last week before this visit, the Area Manager of Warri PPMC was kidnapped and the soldier guarding him was killed. He was just rescued 24 hours before your visit…We have had to operate a 12-hour shift because of this kidnapping issue.' On disruptions of crude oil supply to the WRPC, Babatunde said: 'Only 40-50 per cent crude pumped from Escravos gets to the WRPC. The remaining are vandalized.
'In fact, in less than 30 minutes of pumping crude from Escravos, there is disruption in the system…The state of refineries are in terrible state of disrepair but some works are in progress.'
In his remarks, Senator Abe, flanked by his deputy, Goje and Senators Abdulmumuni Hassan and Ibrahim Musa, who are also members of the committee, commended the WRPC for offering a glimmer of hope that the nation's refineries can still work.
Thereafter, he urged the management of WRPC not to dash the hopes of Nigerians in getting cheaper petroleum products and ending the culture of importation.
'Nigerians believe that as an oil-producing country, we shouldn't be importing fuel. Nigerians don't want to know about the mathematics of oil; all they are concerned with and all they are saying is that Nigeria has no business importing refined products.
'There are lots of expectations from Nigerians on these refineries and they are not being met.' Abe was emphatic that the twin issues of fuel importation and refineries working at optimum capacity cannot be effectively tackled unless the pipelines are restored and allowed to pump crude to the various destinations where they are needed for refining into petroleum products.
Specifically addressing pipeline vandalism and crude oil theft, Abe said 'any investment in the downstream sector will be a drain' if these twin challenges are not quickly tackled. 'Taking fuel from Warri to Maiduguri by trucks is akin to taking them by 'buckets.' No economy can grow that way. We cannot do without the pipelines; this has nothing to do with oil. It has to do with our own survival as a country. A lot still has to be done with the challenges of our pipelines and crude oil theft.'
'This has been a frank and interesting visit…But we note with serious concern, the issue of security in Warri. If we were able to see the Governor, we would have raised the matter with him and the Director of the State Security Services (SSS) and even the Inspector General of Police (IGP).
'Something has to be done very, very quickly because it's not fair that people have to work under the climate of fear…You can't expect optimal result with that kind of situation. 'We don't think it's reasonable to expect much from people who work under an atmosphere of fear and terror. Nigeria has invested so much in Warri and no criminal should be allowed to intimidate the WRPC.'
More shocking to the committee was the revelations that three of the plants in the WRPC have been down for as far as 1987. Earlier, in his presentation to the committee, Babatunde noted that the last time TAM was conducted on the refinery was in 2004.
The Hydrogen Fluoride Alkylation Unit (HFAU), said Babatunde, has been shut down since 2001, equally awaiting total rehabilitation and upgrade. The same applies to the Polypropylene unit which has been shut down since 1998, also awaiting total rehabilitation. Senator Abe replied: 'It's sad that three of these plants have been down for so many years. I will pick it up with the Minister and the NNPC Group Managing Director.
On the pipelines, the lawmaker representing Rivers East senatorial district was emphatic that 'unless we are able to address the issue of security of the pipelines, any investment in the downstream sector will be a drain.'
He harped more on deployment of modern technology for the protection of pipelines rather than reliance on human efforts which have so far proved to be unreliable.
'I believe there are technological ways we can address these challenges. Refineries are critical national assets and we should keep them in the shape we have seen them now. Regardless, it's sad that some of these plants have been down for upwards of 20 years and they are allowed to degenerate to the state that we saw them.
'Some of the challenges in the industry, we believe, the Petroleum Industry Bill will deal with. Along with investing in TAM for our refineries, we should also invest within the NNPC family…We are not going to keep quiet about the security situation in Warri.
'It's a national issue and we won't keep quiet about it.' So serious is the issue of crude oil theft in oil-producing communities across the Niger Delta that it has attracted international attention. Shell Petroleum Development Company of Nigeria Limited, a leading oil exploration company in the country, raised the alarm recently on increased crude theft activities on the new Nembe Creek Trunkline, barely 16 months after the old line was replaced due to repeated sabotage attacks.
On December 24 last year, the line was reportedly shut down because of leaks caused by two failed bunkering points, and since repairs were completed, the company said more than 50 theft valves had been discovered on it.
In one case, some 17 illegal bunkering points were found within a distance of 3.8 kilometres, Shell said.