Reps probe $396m spent on refineries’ maintenance

The House of Representatives has resolved to investigate $396.33 million spent on turnaround maintenance of the nation’s three refineries in four years.

The decision was taken after adopting a motion sponsored by Hon. Ifeanyi Chudy Momah (APGA, Anambra) titled, “Call for investigation of the $396.33 million allegedly spent in four years on turn around maintenance of the nation’s three refineries.”

Presenting the motion, Momah said that Nigeria’s three major refineries, situated at Port Harcourt, Warri and Kaduna, with an installed capacity of 445,000 barrels of oil, enough for domestic consumption and export, had not performed optimally.

He said that the underperformance was due to a combination of factors, including corruption and inefficiency in the running of the refineries which regular “turn around maintenances” have been mismanaged over the years.

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“The House observes the assertion by the Nigeria National Resource Charter (NNRC) in the report that the NNPC spent a whopping $396.33 million between 2013 and 2017 to carry out repair works under the “Turn Around Maintenance” (TAM) scheme on its three decrepit refineries at Port Harcourt, Warri and Kaduna.

“Also observes the claim that the NNPC also spent N276.872 billion on operating expenses of the refineries between 2015 and 2018, as well as $36 billion on the importation of petroleum products between 2013 and 2017.

“Informed that the three refineries contribute less than 10 per cent annually to Nigeria’s Gross Domestic Product (GDP) and they are also among the league of refineries with the highest operating costs worldwide, as their consolidated capacity utilization dropped to 6.1 per cent at the end of September 2017.

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“Concerned that the strategic goal of establishing local refining facilities and its associated supply chain as a socio-economic game-changer that will result in national development has continued to elude the country’s oil and gas industry.

“Further observes that going by the reckoning of the NNRC, the $36 billion the country spent on importation of petroleum products in the last four years could have built four brand new refineries of similar capacity for the country with the same 650,000 barrels per day processing capacity as the refinery that Dangote Group is currently building in Lagos State,” the lawmaker said.

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While adopting the motion, the House called on the Federal Government to consider divesting a certain percentage of its shareholding in Port Harcourt, Warri and Kaduna refineries to competent investors under the transparent and fair bidding process.

It mandated its committee on petroleum resources (downstream) to conduct an investigative hearing on the processes of the “turn around maintenance” (TAM) at the Port Harcourt, Warri and Kaduna refineries by the NNPC between 2013 and date and report within two months.

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