THE Nigerian National Petroleum Company Limited (NNPCL) has revealed plans to hand over the operations and maintenance of the Warri and Kaduna refineries to other operators.
The NNPCL disclosed this in a notice shared on its official X handle on Friday, August 30.
The aim is to engage other operators to manage the refineries which have been moribund for decades.
The notice stated that the transfer was “for the provision of operations and maintenance (O&M) services for NNPC Limited Refineries.”
It added that the combined tender is for “Warri Refining and Petrochemical Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC).”
The state-owned oil company had held a grip on mismanaging Nigeria’s refineries for many years and had been reluctant to hand them over to private firms competent to efficiently run the refining business.
The refineries had refused to function despite all the money spent on turn-around maintenance.
Industry experts have been lamenting the poor maintenance culture of the refineries and have been calling for the takeover of the refineries by private hands.
The new plan to transfer maintenance of Warri and Kaduna refineries to private operators may come as a surprise to many Nigerians as the NNPCL had recently promised that the two refineries would come on stream towards the end of the year.
“Specific to NNPCL Refineries, we have spoken to a number of your committees, that it is impossible to have the Kaduna refinery come to operation before December, it will get to December, both Warri and Kaduna; but that of Port Harcourt will commence production early August this year,” the NNPCL group chief executive officer (GCEO), Mele Kyari, when he appeared before the finance committee of Nigerian Senate on July 15, The ICIR reported.
He added that Nigeria would become a net exporter of petroleum products by December 2024.
Notably, the state-owned refineries had been persistent in posting poor financial records, despite billions of naira spent on the much touted turn-around maintenance.
The latest NNPCL 2023 audited financial statements released on Tuesday, August 20, showed that the state-owned oil company currently owes N3.89 trillion in crude oil forward sale agreements to foreign creditors.
The contract liabilities surged by 34.44 per cent compared to N2.89 trillion it was in December 2022.
The ICIR earlier reported that the NNPC has been borrowing to fund activities at the refinery, even when its operations do not show any capacity to pay back.
Net income is negative, meaning that other metrics of assessing profitability of the company turned out negative.
The Warri refinery was commissioned in 1978 with a nameplate distillation capacity of 6.25 million metric tons per annum equivalent to 125,000 barrels per day.
The Kaduna refinery, commissioned in 1980 with an initial capacity of 50,000 barrels per day, has been expanded to a 110,000-per-day refining capacity.