OrderPaperToday – The House of Representatives has resolved to carry out an investigative hearing and conduct a comprehensive audit of funds previously spent on the repairs and maintenance of the Port-Harcourt refinery and other refineries in the country and the key performance indicators therefrom.
The House made the decision on Wednesday while unanimously adopting a motion which sought to mandate the House Committee on Petroleum Resources Downstream to make the investigation.
Accordingly, the House also mandated the Committee to examine the performance bond, assurance, warrantees and guarantees put in place for operating and maintaining the plants after commissioning and report to the House within six weeks for further legislative action.
Also the lawmakers urged the federal government to grant license and provide incentives for the building and construction of modular refineries.
The following resolutions were reached during plenary sequel to a motion presented by Mr. Onofiok Luke (PDP, Akwa Ibom).
Mr. Onofiok noted that the recent approval of the sum of $1.5 billion (about N575 billion) for immediate commencement of rehabilitation work on the 32-year-old Port Harcourt refinery was phased at an estimated completion period of 44 months (approximately – 4 Years) with a three components funding from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions, and Afreximbank.
He further noted that the Port Harcourt refinery located in Alesa Eleme southeast of Port Harcourt, operates two oil refineries, including an old plant commissioned in 1965 that has the capacity to process 60,000 barrels (9,500 m3) per stream a day, as well as the new plant commissioned in 1989, which has a capacity of 150,000 barrels (24,000 m3) per stream a day.
He however expressed concern that NNPC had allegedly spent about $25 billion in Turn Around Maintenance (TAM) of refineries in the past 25 years, adding that the latest development could be linked several promises made by the current administration that government was no longer going to spend money on the facility.
He also stated that, “previous rehabilitations notwithstanding, the Nigerian National Petroleum Corporation (NNPC) audit report had last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 operations. Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses. The three refineries processed no crude because of the rehabilitation works being carried out on them, therefore, there was no associated crude plus freight cost for the three refineries since there was no production but operational expenses that amounted to ₦10.27 billion. This resulted in an operating deficit of ₦10.23 billion by the refineries.”
He expressed concern that just in “July 2017 major structural construction began on Dangote 650,000 bpd Refineries with partial refining capability likely in 2022. The same lag period that rehabilitation would be carried out on the 210,000 bpd Port Harcourt Refineries.
“Deeply worried by the public uproar on this latest initiative, the voice of the National Assembly must be recorded to ensure judicious use of the proposed 1,5billion Dollars considering facts that the facility has failed to perform after years of rehabilitation, repair and maintenance,” he submitted.