Corporation on Wednesday said it had
engaged the services of in-house
engineers to rehabilitate the country’s
three ailing refineries at a cost of
$550m (N99bn)
, down from the $1.6bn
(N288bn) presented to it by foreign
contractors.
The refineries are the Port
Harcourt Refining Company,
Kaduna Refining and
Petrochemical Company Limited
and the Warri Refining and
Petrochemical Company Limited.
The Group Executive Director,
Refining and Petrochemicals,
NNPC, Mr. Ian Udoh, stated that the
corporation resolved to use
indigenous engineers because it
could not pay the bills of foreign
contractors who were nominated
by the original builders of the
refineries.
Udoh spoke during a press briefing
organised by the corporation to
refute claims that it was indicted by
the report of the forensic audit
carried out on its operations by
PriceWaterhouseCoopers.
He said, “For the three refineries,
the estimates going with the
nominees of the original builders
of the refineries would have come
up to $1.6bn. But we can’t afford
that because we are not going to get
any funding from the government
for that.
“We examined the work scope and
picked up the essential things that
we must do to get these refineries
to operate optimally at around 90
per cent of capacity. That was done
and we did the pricing template;
not the international rates, we used
the local rates. And everything for
the three refineries combined came
to around $550m, which is
significant, maybe up to 70 per
cent reduction.
“Even the $550m is quite much. So,
we amortised it over 18 months so
that we will be able to swallow it in
bits more easily. The 18 months
started since last October and this
means that early next year, the
refineries should be in shape.”
He stated that the original builders
of the refineries were not willing to
come to Nigeria but nominated
their partners to handle the
turnaround maintenance of the
facilities.
The partners, according to Udoh,
are not willing to give post
rehabilitation performance
guarantee, adding that their prices
were exceedingly high.
He said, “So, a new pact had to be
taken, which is more affordable for
the NNPC, that is, to rehabilitate all
the refineries simultaneously,
resorting more to what is locally
available. And these include the in-
house engineers and such
contractors that have been working
with us all these years who are
familiar with the plant.
“Part of that plan is that if there is
any challenging big equipment, we
resort to the original
manufacturers to send a
representative to join our engineers
on the ground to carry out
whatever is needed to be done.”
Earlier in his address, the Group
Managing Director, NNPC, Dr.
Joseph Dawha, had explained that
the $1.48bn, which PwC directed it
to remit to the Federation Account,
was the balance of the book value
of the divested assets that were
transferred to the Nigerian
Petroleum Development Company,
excluding taxes and royalties.
“This value is still being reconciled
with the Department of Petroleum
Resources,” he added.
He stated that what the DPR sent to
the corporation as the estimated
value of the assets was $1.847bn,
out of which the NNPC paid over
$300m as a token to indicate its
commitment to acquiring the assets
pending resolution and
reconciliation by both
organisations.
On why the NNPC had not been
able to tackle pipeline vandalism
despite installing electronic
monitoring gadgets on them, the
corporation’s Group Executive
Director, Engineering and
Technical, Mr. Adebayo Ibirogba,
stated that the technology might
detect immediately where a
pipeline had been blown up, but
the ability to respond speedily was
an issue.
