Wike, Mailafia Not Excited About $1.5b PH Refinery Rehabilitation
Rivers State Governor Nyesom Wike and one time Central Bank of Nigeria (CBND) Deputy Governor Obadiah Mailafia are not excited about the Federal Executive Council’s approval of $1.5 billion to rehabilitate the Port Harcourt Refinery.
But the Petroleum and Natural Gas Workers Senior Staff Association of Nigeria (PENGASSAN) and major oil marketers endorsed the action.
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An Italian firm Tecnimont S.p.A has been hired to fix the moribund refinery.
The rehabilitation billed for completion in three years and eight months, will be done in three phases of 18, 24 and 44 months, Minister of State for Petroleum Resources, Timipre Sylva, told reporters in Abuja.
He spoke after the weekly Federal Executive Council (FEC) meeting at the State House.
The Petroleum and Natural Gas Workers Senior Staff Association of Nigeria (PENGASSAN) described the step as one taken in the right direction, promising to mobilise all stakeholders to ensure that rehabilitation of the nation’s four refineries.
Explaining the phased rehabilitation, Sylva said the funding has three components from Nigerian National Petroleum Corporation (NNPC) Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.
The minister also assured that local content is fully involved in the job.
He said: “The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of 1.5 billion, and that memo was $1.5 billion and it was approved by council today.
“So, we are happy to announce that the rehabilitation of productivity refinery will commence in three phases. The first phase is to be completed in 18 months, which will take the refinery to a production of 90 per cent of its nameplate capacity.
“The second phase is to be completed in 24 months and all the final stage will be completed in 44 months and consultations are approved and I believe that this is good news for Nigeria.”
Addressing the problem of maintenance, which has dogged the nation’s four refineries over the years, Sylva said the refineries would be handed over to operations and maintenance firms to manage.
He added that the management aspect for the refurbished refineries was part of the conditions given by lenders of the funds for the maintenance project, adding that the condition had been embedded in the agreement.
Sylva said: “On the other very germane question about operations and maintenance. That has been a big problem for our refineries, as we all know, that was also exhaustively discussed in Council and the agreement is that we’re going to put a professional Operations and Maintenance company to manage the refinery when it has been rehabilitated.
“In any case, it is actually one of the conditions presented by the lenders, because the lenders say they can only give us the money if we have a professional operations and maintenance company, and that already is embedded in our discussions with the lenders and we cannot go back on that.”
According to him, the project’s funding issue had been sorted out, explaining that “I want to answer that the funds are all in place and work will commence forthwith.
“There are various components to the funding: there is funding from NNPC internally generated revenue, there is funding from the budget and there is also a debt funding. For the lenders, we are dealing with AFREXIM and they are very committed to us, we have actually concluded discussions with AFREXIM.”
On how the country settled for an Italian company, instead of the original builders, the minister explained: “We found out from the original refinery builders that they are not in the business of rehabilitating refineries, they are in the business of building refineries. So they actually pointed us to a rehabilitation company that we’re dealing with now.”
He also said the interest of local contractors have been factored into the maintenance component.
“NCDMB is fully part of the contracting process and has safeguarded the interest, adequately, of our local contractors, so our local people will be fully involved with the Tecnimont S.p.A”, he said.
The rehabilitation of other refineries in Kaduna and Warri will kick-off before the end of the current administration.
“On the last question, which is when the other refineries will also be rehabilitated? Discussions are ongoing. We want to take one at a time and I want to assure you that before the lifetime of this administration expires, work on all the refineries would have at least commenced”, he said.