FG to mend Port Harcourt Refinery with $300 million
The Federal Government yesterday said that there was no arrangement to concession the Port Harcourt Refinery. The government also revealed that the planned revamping of the refinery would cost the country about $300 million.
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made the disclosure at a sitting of the Senate Ad-hoc Committee on “the planned concession of the Port Harcourt Refinery to Agip/Eni and Oando Plc.”
Chairman of the committee, Senator Abubakar Kyari, took on the Minister on the statement credited to him that the Federal Government was sourcing for investors to take over the Port Harcourt Refinery.
Senator Dino Melaye, a member of the committee, wanted Kachikwu to tell the committee whether the Memorandum of Understanding (MoU) of the concession had been signed. Melaye also asked the Minister to react to another report that approval for the concession had already been given by the Federal Government.
In his response, the Minister told the committee that as the driver of the policy, there has never been any approval by President Muhammadu Buhari for the concession of the Port Harcourt Refinery.
He noted that what was decided was that government will no longer put money for the turn around maintenance of refineries in the country but would look for private funding for the repair and revamping of the refineries, including the Port Harcourt Refinery.
He said that 26 investors have already indicated interest to repair the Port Harcourt Refinery, which made them to set up a technical committee to vet the investors for the selection of a credible investor that would do the work.
Kachikwu, who insisted that there was no attempt whatsoever to concession or sell the Port Harcourt Refinery, said that the selected investor would be paid back from the sale of products.
Chairman of the committee said there were pointers created by the drivers of the policy to show that there may be some plan to concession the refinery.
Kachikwu responded: “I could not have been talking about concession when there was no concession. I could not have been talking about sale when there was no sale. I did not say concession because there was no plan to concession. But we decided that anybody who wants to come on board is welcome to come on board. I have not signed any MoU.”
The Minister also denied that he said there will not be open bidding for the repair of the refinery, noting that the technical committee handling plans for the repair work sent out open invitation for interested investors to indicate interest.
Asked whether he has assessed how much it would cost to do the repair work, Kachikwu said that from the input of the technical committee, it will cost about $300 million to revamp the refinery. Repairing the four refineries in the country, he said, would gulp over $1.2 billion.
On terms of repayment of investors, Kachikwu said the arrangement is “give us the money we pay back by incremental volumes.”
Pressed further on the signing of MoU, the Minister said, “my attention has just been drawn to the fact that what was signed in Italy was actually MoU and not a Memorandum of Minutes. It covers transformation and repair of the refineries including Port Harcourt Refinery. It is not take over.”
The Managing Director, Oando Plc, Wale Tinubu corroborated Kachikwu’s submission that there was no plan to concession Port Harcourt Refinery. Tinubu also denied ever saying that his company would take over the Port Harcourt Refinery.
He said, “no concession, no privatisation and no sale of any refinery. We are only trying to find solution to the perennial disgrace. It is a national disgrace that we export crude and import petrol. We need to fix our refineries.”
Senate President, Bukola Saraki, who inaugurated the ad-hoc committee said the prevailing economic situation in the country made it important that things should be done correctly in order not to send the wrong signals to investors and international development partners.
Represented by Senator Barnabas Gemade, Saraki said, “for us to move forward, we should be seen to be doing right things in line with the change agenda of the present administration.”
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