Nigerians should expect functional Kaduna and Warri refineries by the end of December this year, the acting Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Lawal Yar'Adua, has pledged.
To meet the target, the NNPC has awarded a N6.5 billion ($52 million) contract to a local firm for the repair of the Chanomic creek channel pipeline, which supplies crude oil to the two refineries.
Yar'Adua, who disclosed this to journalists yesterday in Vienna, Austria, said it is a Christmas present the corporation is planning for the citizens.
Although the Federal Government has unbundled the NNPC and renamed it National Oil Company (NOC), the corporation will continue to operate in its present status until the National Assembly passes the law on the recent restructuring in the oil and gas industry.
He said the contract was awarded to an indigenous oil service firm, which had worked with the multi-national oil companies in the Niger Delta region.
According to Yar'Adua, " the community people have assured us of access to the place, we have evaluated the contract, we have signed the agreement with the community and we expect to finish this in four months. But I am putting pressure to see if we can reduce this to three months. We are looking at the possibility of bringing the refineries back on stream maybe before the end of December to see if we can give Nigerians a Christmas present."
"It was over N12.6 billion ($100 million) but I have successfully negotiated it down, with the use of the indigenes to around $52 million (N6.5 billion)," Yar'Adua said.
With the arrangement, the NNPC boss said, he had saved half of the cost of the contract for the country.
Yar'Adua insisted that the local contractors were technically capable to handle the job.
"From the perspective I know, that may be possible. But what I did when I took over was to give the indigenes of the community an opportunity. It is no more Wilbros or any other big firm, it is going to the indigenes of the place. That is my strategy for resolving the situation," he said.
Yar'Adua explained that all that was required was for the contractors to cut the line and weld it back to standard since the firm now had access to the spot where the pipeline was vandalised, adding that the local company was prequalified and had been working for Shell and Mobil.
"We got them from the oil industry. So it is not as if we picked a group without pedigree," he stated.
As part of the efforts to protect the pipelines from vandals, the NNPC boss said the management had signed a surveillance contract with the communities, stressing that by involving the people in the repair and surveillance it would go a long way in stemming the activities of the vandals in the region.
On the incessant vandalisation of the Escravos-Lagos pipeline, which supplies gas to Egbin Power Station and other gas users in the western part of the country, Yar'Adua said President Umaru Musa Yar'Adua had approved fund for the repair in view of the strategic nature of the pipeline to the power sector and the industrial sector.
"The line was vandalised by militants and we just repaired it and restored gas supply to Egbin. We achieved this a few days ago after spending more than N2 billion. Now we have found five new vandalised points. I then had to go back to Mr. President and he has approved that the affected areas should be repaired. So really, the gas is available but the line is being vandalised," he said.
Yar'Adua pointed out that the refineries were technically ready and in good shape.
" Port Harcourt is operating. Today it is operating at about 60 per cent capacity, we are going back to 70 to 80 per cent. The Kaduna Refinery is operating at 85 per cent capacity. Warri was operating until the 18th February, 2006, that was when the crude oil pipeline was vandalised," he said.
At the Organisation of Petroleum Exporting Countries (OPEC) secretariat yesterday in Vienna, Minister of State for Energy (Petroleum), Mr. Odein Ajumogobia, said the National Energy Council set up recently by the government would review the issue of refineries as contained in the Oil and Gas Reform Implementation Committee(OGIC).
Ajumogobia said his major pre-occupation was to fix the refineries to meet domestic demand, adding however that it would take sometime to put the refineries in good shape.
The minister, who is attending the OPEC meeting for the first time and as head of Nigerian delegation to the conference, said initial bidders for the refineries declined to continue with the exercise. He said that it was therefore imperative that government looks for ways to revive the plants and make them functional to meet the fuel need of the country.
He noted that even at full capacity, the refineries could not produce enough for domestic consumption.
Ajumogobia explained that the problems with the refineries were systemic and bordered on spare parts, power generation and pipeline vandalisation, assuring that by the time government fixed these parts, the plant would deliver products to Nigerians.
On the new refineries announced by the former Group Managing Director of NNPC Mr. Funso Kupolokun, Ajumogobia said that the modality for the exercise was sketchy. He said it was not clear under what arrangement the new refineries would be built.
"I cannot say whether government will do it alone or in partnership with private sector but what concerns me now is to fix what we have. That is what we will do for a while,'' he said.
From Yakubu Lawal, Vienna, Austria
The Guardian
Tuesday, September 11, 2007
