$1.5bn: Nigerians react as FG moves to rehabilitate PH Refinery

By Eyo Nsima

Many Nigerians have reacted as the Federal Government moves to rehabilitate the Port Harcourt Refinery, which has two plants at the cost of $1.5 billion.

For instance, Prof. Omowumi Iledare,  the Ghana National Petroleum Corporation (GNPC) Professorial Chair in Oil and Gas Economics and Management,  Institute for Oil and Gas Studies, University of Cape Coast, Ghana, said: “I am of the opinion that the refinery is an asset worth preserving.  I am also hopeful that an incremental economic analysis favours investing $1.5 billion to repair, in comparison to scraping or selling it as junk.”

He added: “In the longer run, value addition must have been the driving force behind the device to repair. I hope that much value will be created in the long run.”

However, the National President, Oil, and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, also said: “It is doubtful if the adventure would culminate in the rehabilitation of the Refinery, and deliver adequate petroleum products to consumers, as previous efforts did not provide such products on a sustainable basis. Almost all past administrations have at different times spent huge funds to maintain the refineries, without much result to show. It is just another planned way to spend money, especially now that it is apparent that the $15 billion Dangote Refinery would come on stream in 2022. The government should not be encouraged to undertake such maintenance.”

Minister of State for Petroleum Resources, Chief Timipre Sylva, had while briefing State House reporters after Council meeting in Abuja said: “The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of $1.5 billion, and it was approved by council today. So, we are happy to announce that the rehabilitation of Port Harcourt 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 percent of its nameplate capacity. The second phase is to be completed in 24 months and the final stage will be completed in 44 months and the contract was approved.

“The contractor that was approved by council today is Messrs. Tecnimont spa, an Italian EPC company, that won the bid and that was approved by the council. That has been a big problem for our refineries, as we all know; that was also exhaustively discussed in the council and the agreement is that we are 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 operation and maintenance company and that already is embedded in our discussions with the lenders and we cannot go back on that.”