Port Harcourt refinery kick-off postponed 6th time

The Port Harcourt Refining Company, a refinery under the management of the Nigerian National Petroleum Company Limited in Rivers State, has again failed to commence operations after about six postponements.

It was observed that promises made to Nigerians by the Federal Ministry of Petroleum Resources and NNPC about the refinery have continued to witness multiple failures, reports The PUNCH.

Since December 2023, NNPC, which is in charge of all the government refineries, has given Nigerians different dates, assuring citizens that the refinery would begin the sale of refined products soon.

In July, the Group Chief Executive Officer of the NNPC, Mele Kyari, stated categorically that the refinery would come into operation in early August.

The same Kyari said in 2019 that the NNPC would deliver all the country’s four refineries before the end of former President Muhammadu Buhari’s administration.

While appearing before the senate recently in July, Kyari boasted, “I can confirm to you, Mr Chairman, that by the end of the year, this country will be a net exporter of petroleum products.

“Specific to NNPC refineries, we have spoken to a number of your committees, and it is impossible to have the Kaduna refinery come into operation before December, it will get to December, both Warri and Kaduna, but that of Port Harcourt will commence production early August this year.”

However, as August nears midpoint, the refinery has yet to commence operations, creating concerns that this might be another failed promise from NNPC.

Replying to inquiries from our correspondent yesterday, the NNPC said it was on course, even when the early August promise has expired.

In a chat with our correspondent, the NNPC spokesperson, Olufemi Soneye, tersely replied, “We are on course.”

Soneye did not reply to further questions, asking if he meant the refinery would still operate this month.

Recall that the 210,000 barrels per day refinery was said to have reached what the NNPC called mechanical completion of rehabilitation work in December.

It stated that the facility would start refining 60,000 barrels of crude oil daily after last year’s Christmas break.

Later in January, Kyari said the refinery was being tested and would be ready by the end of January.

During the second month of the year, the Shell Petroleum Development Company of Nigeria Limited completed the supply of 475,000 barrels of crude oil to the Port Harcourt refinery, raising the expectations of marketers that production was set to commence.

This came a few weeks after NNPC said in January it was seeking to engage reputable and credible operations and maintenance companies to run the Port Harcourt refinery. NNPC did not disclose whether or not it had secured bidders to run the refinery.

In mid-March, Kyari said the Port Harcourt refinery would commence operations in two weeks, April.

“We are serving this country with honour and dignity. And we will make sure that the promises we make on the rehabilitation of these refineries will take place,” Kyari stated after he appeared before the Senate Ad-hoc Committee investigating the various turnaround maintenance projects of the country’s refineries.

As the April deadline elapsed, independent petroleum marketers told our correspondent that the facility would begin production by the end of July.

Commenting on this, NNPC’s Chief Corporate Communications Officer, Soneye, said regulatory approvals from international bodies were the only impediment stalling the operational commencement of the refinery.

“We have said that the mechanical completion has been done and every other thing is done. There is crude oil and all the pipes are working; we are only waiting for regulatory approvals. As I said, some of our materials and the things we use have to do with nuclear, and we need the nuclear authorities to give us approval to use all those things at the site.

“And some of these approvals come from bodies outside of Nigeria. Until they give us those approvals, we can’t begin operations. We are ready to go but if something happens without it, which would be another issue. Everything has been completed in terms of our work, and once we get those approvals, it will start operations,” Soneye revealed in May.

Some Nigerians have expressed disappointment that the nation’s refineries have remained moribund for years. The country has since depended on imported fuel as it lacks refining capacity, spending up to N2tn monthly.

The President of the Dangote Group, Aliko Dangote, said $4bn had been spent by the Federal Government in an attempt to revive the nation’s refineries.

Obasanjo talks tough

While addressing some House of Representatives members who visited him in Abeokuta on Friday, former President Olusegun Obasanjo recalled how Shell refused his pleas to help run the refineries when he invited them during his days as the president, blaming corruption and poor management.

According to Obasanjo, some Nigerians later paid $750m to take over the refineries, however, his successor turned it back.

“I ran to him, I said, ‘You know this is not right’. He said, ‘Well, NNPC said they can do it’. I said ‘NNPC cannot do it’. I told my successor that ‘the refineries, from what I heard and know, will not work and when you want to sell them, you will not get anybody to buy them at $200m as scrap’. And that is the situation we are in.

“So, why do we do this kind of thing to ourselves? NNPC knew that they could not do it, but they knew they could eat and carry on with the corruption that was going on in NNPC. When people were there to do it, they put pressure. In a civilized society, those people should be in jail,” Obasanjo posited.

He told the lawmakers that he was aware they were investigating the $1.5bn the NNPC has spent on the Port Harcourt refinery.

The refinery, situated in Nigeria’s oil-rich Niger Delta region, has been in operation since 1965, but later became moribund for several years. The Alesa Eleme refinery complex is approximately 25km east of Port Harcourt.

In March 2021, the Nigerian government acquired a $1.5bn loan for the renovation and modernisation of the refinery; a move that was criticised by former Vice President Atiku Abubakar, who advocated the sale of all government refineries.

While reacting to the plan to hand the refinery over to private managers, Atiku tackled former President Muhammadu Buhari and the incumbent President Bola Tinubu for failing to heed his advice that the refinery and others owned by the government should be sold to private individuals.

Earlier, NNPC disclosed that it signed an agreement with the African Refinery Port Harcourt Limited for the subscription of 15 per cent equity by ARPHL in the Port Harcourt Refining Company.

Parties in the deal said the agreement would lead to an increase in the refining capacity of the Port Harcourt refinery from 210,000 barrels per day to 310,000bpd.

PHRC is one of the three national refineries under the management of NNPC.

Meanwhile, the Senate has raised questions over the $1.5bn approved in 2021 for the renovation of the refinery.

The upper chamber lamented that it is “unfair and wrong to treat government businesses or public companies as an orphan while private businesses were flourishing and thriving.”

The Senate Leader and Chairman of the Senate ad-hoc Committee to investigate the alleged economic sabotage in the Nigerian Petroleum Industry, Opeyemi Bamidele, raised the questions at a session with stakeholders in the industry in Abuja.

At the session, Bamidele expressed concerns over the dysfunctionality of the government-owned refineries despite investments to carry out turn-around maintenance.

Nigerians are hopeful that the refinery will stop fuel importation and crash the pump price of petrol when completed.