The Nigerian National Petroleum Corporation has
recommended the sale of the nation’s three
refineries in Port Harcourt, Warri and Kaduna due
to some challenges the agency described as
critical elements, which may continually hinder
their effective operation in the hands of the
Federal Government.
NNPC has equally finalised its position on the
protracted pipeline surveillance, with a verdict
that the protection of the pipelines be entrusted
to the military, which it believes can effectively
protect the critical facilities.
A source in the corporation, who spoke to one of
our correspondents on Saturday in Abuja, said the
corporation’s stance was informed by the position
of the NNPC Stock Reconciliation Committee,
which met last week in Abuja to assess the
performance of the refineries and associated
logistics.
The source, who is very close to the committee,
explained that the committee concluded that the
operation of the refineries could not be profitable
under the current arrangements, which the panel
described as unfavourable.
The source, who spoke on condition of anonymity,
explained that the Ship-to-Ship transfer, which
the corporation has employed to get crude oil to
the refineries, cost between $6m and $7m per
vessel and load one million metric tonnes of crude
oil.
“MC COSMIC and MC JEWEL, which are engaged
to transfer crude to Warri refinery because of their
carrying capacities of about one million metric
tonnes, collect between $12 and $14m per
operation(trip). These are heavy vessels that load
crude and transfer to smaller vessels. They then
transport the crude to where the product can be
transferred to the refineries.
“The same scenario is replayed to get the crude
to the Port Harcourt refineries. If you add the
amount to the already huge cost, you will realise
that the nation cannot sustain the refineries on
the prevailing conditions,” the source added.
The committee, it was learnt, also recommended
the stoppage of the SWAP and the Offshore
Processing Agreement (which had been carried
out), in order to increase local availability of
crude to the refineries.
“Crude business is done three months ahead. It
was already concluded during the immediate past
administration that the three refineries would be
sold, even though the government had stocked all
the materials for the turnaround maintenance of
the refineries.
“So, there wouldn’t have been any crude for the
local refineries if the SWAP deal and the OPA had
not been cancelled; so, the quota that would have
been exported was rescheduled to the three
refineries,” our source said.
Disclosing that the Kaduna refinery started
production from its Fractional Cracking Catalytic
Unit at 11.50am on Saturday, the source,
however, said the threat posed by pipeline
vandalism remained the greatest challenge to the
local refining of petroleum products.
“Kaduna refinery has the capacity to crack any
type of crude from any part of the world, be it
light or heavy. The FCCU, which produces all
components of petroleum products from the crude
supplied, started production at about 11.50 this
morning. During the week, it was undergoing
processing,” the source added.
“The fear of the committee, however, is that the
number of leakages along the Warri-Kaduna
pipeline will not allow the transfer of petroleum
products to continue. In July, when the Kaduna
refinery was about to start production, the
pipeline had been breached in 78 points between
Warri and Lokoja. The vandals have been able to
identify the difference between the pipelines
carrying crude, gas and refined petroleum product.
And once there is a breach in one of the pipelines,
other pipeline will be shut down.”
The source equally explained that the menace of
vandals would also not allow fuel tankers to
leave the nation’s highways soon, especially
Lagos.
He said the NNPC had recommended to the
Federal Government that the military should be
directed to take over pipeline surveillance, as the
agency would no longer be able to carry out the
protection of the pipelines across the country.
“With about 250 points being attacked on a
monthly basis, and the huge cost of putting them
back in shape, there is no way the government
can sustain such losses, which it had intended to
stop,” he stated.
The source said owing to the challenges outlined
by the committee, the panel believed the best
operation for the government was to sell the
refineries in their current state while holding on to
a “minimal stake” in the facilities.
“The recommendation is that the government
should sell the refineries as they are. The same
principle applies to our cars; it gets to a point
that we believe that they are no longer serving
the purpose for acquiring them. The refineries
have become a burden. It has been recommended
that if the government will not embark on outright
sale of the refineries, it should go into partnership
but hold a minimal stake in the venture, especially
with those who built the refineries initially,” the
source added.
It was also gathered that the government had
been advised to facilitate the setting up of
modular refineries, which are smaller but runs on
modern technology, to replace the existing
facilities, which are even obsolete.
However, President Muhammadu Buhari is said to
have disagreed with selling the refineries for now
on the ground of what the source explained was
based on “social and political” factors.
“You know the connection between the President
and how he facilitated the setting up of the
refineries in Port Harcourt. He is highly concerned
about what the people will say. He is also said to
be considering what the cost of petroleum
products will be after the sales; considering what
the government pays silently at the moment to
make sure petroleum products are readily
available,” the source said, while explaining that
Buhari’s reaction had been made known to the
top management of the NNPC.
Meanwhile, the NNPC has denied any plans to sell
the country’s refineries at present.
According to the corporation, reforms by its new
management have not suggested the sale of the
three refineries located in Warri, Port Harcourt
and Kaduna.
The corporation’s Group General Manager, Group
Public Affairs Division, Mr. Ohi Alegbe, told our
correspondent on Saturday that although the firm
had undertaken series of reforms since its new
management came onboard, it had not
recommended the sale of the national refineries.
Alegbe said, “There is nothing like that.”
When told that there are concerns that the NNPC
might not be able to protect the pipelines and
that the Federal Government should take over the
surveillance of the facilities, the corporation’s
spokesperson replied, “It is also not true.”
On the level of vandalism and how it affects the
respective capacities and outputs of the refineries,
Alegbe stated that the corporation had adopted
various measures to check the menace of crude
oil pipelines destruction.
Explaining how the corporation had been
protecting the pipelines in the interim since the
cancellation of various pipelines’ protection
contracts, he said the NNPC had engaged
security agents of different communities where
the facilities run through.
Alegbe said, “Firstly, there was no contract with
the OPC (Oodua Peoples Congress) please. We
have the police, the military and we also engage
with community-based groups. And it is not as if
the pipelines were left unprotected. We have the
military, the civil defense and the police, and
some leaders of communities that are bordering
some of these pipelines have been involved in the
protection process.”
One of the latest reforms of the NNPC’s new
management, which was carried out last week,
was the trimming down of the off-takers for the
lifting of Nigeria’s crude oil from 43 to 16.


Source: http://www.punchng.com/news/nnpc-recommends-sale-of-refineries-buhari-disagrees/

What I don't understand is why a refinery should be sighted so up North in Kaduna knowing there's no readily crude to service it, now we are faced with paying huge sum of money to security agencies for pipeline protection

I would read this text book after Sunday school

Prodigal son everywhere. PMB should not listen to their bad advice on selling the nation refineries instead he should deploy more security personnel to our pipelines and make death penalty for anyone caught of vandalism.

Enemies of our progress

Bugatie:
What I don't understand is why a refinery should be sighted so up North in Kaduna knowing there's no readily crude to service it, now we are faced with paying huge sum of money to security agencies for pipeline protection

ARE YOU ONE OF THEM? WHY DO YOU HATE ANYTHING NORTH?

mustymatic:

ARE YOU ONE OF THEM? WHY DO YOU HATE ANYTHING NORTH?

One of what? Businesses are sighted in close proximity to raw materials availability.
Does it even make economic sense to you that thousands of pipes were laid just to ferry crude up to Kaduna?

And the govt is also faced with maintaining surveillance over these pipes

Bugatie:


One of what? Businesses are sighted in close proximity to raw materials availability.
Does it even make economic sense to you that thousands of pipes were laid just to ferry crude up to Kaduna?

And the govt is also faced with maintaining surveillance over these pipes

It's a refinery for God's sakes, how many refineries are there in the north? At least for availability sake.

Abbycite:
The Nigerian National Petroleum Corporation has
recommended the sale of the nation’s three
refineries in Port Harcourt, Warri and Kaduna due
to some challenges the agency described as
critical elements, which may continually hinder
their effective operation in the hands of the
Federal Government.
NNPC has equally finalised its position on the
protracted pipeline surveillance, with a verdict
that the protection of the pipelines be entrusted
to the military, which it believes can effectively
protect the critical facilities.
A source in the corporation, who spoke to one of
our correspondents on Saturday in Abuja, said the
corporation’s stance was informed by the position
of the NNPC Stock Reconciliation Committee,
which met last week in Abuja to assess the
performance of the refineries and associated
logistics.
The source, who is very close to the committee,
explained that the committee concluded that the
operation of the refineries could not be profitable
under the current arrangements, which the panel
described as unfavourable.
The source, who spoke on condition of anonymity,
explained that the Ship-to-Ship transfer, which
the corporation has employed to get crude oil to
the refineries, cost between $6m and $7m per
vessel and load one million metric tonnes of crude
oil.
“MC COSMIC and MC JEWEL, which are engaged
to transfer crude to Warri refinery because of their
carrying capacities of about one million metric
tonnes, collect between $12 and $14m per
operation(trip). These are heavy vessels that load
crude and transfer to smaller vessels. They then
transport the crude to where the product can be
transferred to the refineries.
“The same scenario is replayed to get the crude
to the Port Harcourt refineries. If you add the
amount to the already huge cost, you will realise
that the nation cannot sustain the refineries on
the prevailing conditions,” the source added.
The committee, it was learnt, also recommended
the stoppage of the SWAP and the Offshore
Processing Agreement (which had been carried
out), in order to increase local availability of
crude to the refineries.
“Crude business is done three months ahead. It
was already concluded during the immediate past
administration that the three refineries would be
sold, even though the government had stocked all
the materials for the turnaround maintenance of
the refineries.
“So, there wouldn’t have been any crude for the
local refineries if the SWAP deal and the OPA had
not been cancelled; so, the quota that would have
been exported was rescheduled to the three
refineries,” our source said.
Disclosing that the Kaduna refinery started
production from its Fractional Cracking Catalytic
Unit at 11.50am on Saturday, the source,
however, said the threat posed by pipeline
vandalism remained the greatest challenge to the
local refining of petroleum products.
“Kaduna refinery has the capacity to crack any
type of crude from any part of the world, be it
light or heavy. The FCCU, which produces all
components of petroleum products from the crude
supplied, started production at about 11.50 this
morning. During the week, it was undergoing
processing,” the source added.
“The fear of the committee, however, is that the
number of leakages along the Warri-Kaduna
pipeline will not allow the transfer of petroleum
products to continue. In July, when the Kaduna
refinery was about to start production, the
pipeline had been breached in 78 points between
Warri and Lokoja. The vandals have been able to
identify the difference between the pipelines
carrying crude, gas and refined petroleum product.
And once there is a breach in one of the pipelines,
other pipeline will be shut down.”
The source equally explained that the menace of
vandals would also not allow fuel tankers to
leave the nation’s highways soon, especially
Lagos.
He said the NNPC had recommended to the
Federal Government that the military should be
directed to take over pipeline surveillance, as the
agency would no longer be able to carry out the
protection of the pipelines across the country.
“With about 250 points being attacked on a
monthly basis, and the huge cost of putting them
back in shape, there is no way the government
can sustain such losses, which it had intended to
stop,” he stated.
The source said owing to the challenges outlined
by the committee, the panel believed the best
operation for the government was to sell the
refineries in their current state while holding on to
a “minimal stake” in the facilities.
“The recommendation is that the government
should sell the refineries as they are. The same
principle applies to our cars; it gets to a point
that we believe that they are no longer serving
the purpose for acquiring them. The refineries
have become a burden. It has been recommended
that if the government will not embark on outright
sale of the refineries, it should go into partnership
but hold a minimal stake in the venture, especially
with those who built the refineries initially,” the
source added.
It was also gathered that the government had
been advised to facilitate the setting up of
modular refineries, which are smaller but runs on
modern technology, to replace the existing
facilities, which are even obsolete.
However, President Muhammadu Buhari is said to
have disagreed with selling the refineries for now
on the ground of what the source explained was
based on “social and political” factors.
“You know the connection between the President
and how he facilitated the setting up of the
refineries in Port Harcourt. He is highly concerned
about what the people will say. He is also said to
be considering what the cost of petroleum
products will be after the sales; considering what
the government pays silently at the moment to
make sure petroleum products are readily
available,” the source said, while explaining that
Buhari’s reaction had been made known to the
top management of the NNPC.
Meanwhile, the NNPC has denied any plans to sell
the country’s refineries at present.
According to the corporation, reforms by its new
management have not suggested the sale of the
three refineries located in Warri, Port Harcourt
and Kaduna.
The corporation’s Group General Manager, Group
Public Affairs Division, Mr. Ohi Alegbe, told our
correspondent on Saturday that although the firm
had undertaken series of reforms since its new
management came onboard, it had not
recommended the sale of the national refineries.
Alegbe said, “There is nothing like that.”
When told that there are concerns that the NNPC
might not be able to protect the pipelines and
that the Federal Government should take over the
surveillance of the facilities, the corporation’s
spokesperson replied, “It is also not true.”
On the level of vandalism and how it affects the
respective capacities and outputs of the refineries,
Alegbe stated that the corporation had adopted
various measures to check the menace of crude
oil pipelines destruction.
Explaining how the corporation had been
protecting the pipelines in the interim since the
cancellation of various pipelines’ protection
contracts, he said the NNPC had engaged
security agents of different communities where
the facilities run through.
Alegbe said, “Firstly, there was no contract with
the OPC (Oodua Peoples Congress) please. We
have the police, the military and we also engage
with community-based groups. And it is not as if
the pipelines were left unprotected. We have the
military, the civil defense and the police, and
some leaders of communities that are bordering
some of these pipelines have been involved in the
protection process.”
One of the latest reforms of the NNPC’s new
management, which was carried out last week,
was the trimming down of the off-takers for the
lifting of Nigeria’s crude oil from 43 to 16.


Source: http://www.punchng.com/news/nnpc-recommends-sale-of-refineries-buhari-disagrees/

make I laf