CALLS are growing louder for the sale of Nigeria’s three major refineries in Port Harcourt, Warri, and Kaduna, following recent reforms at the Nigerian National Petroleum Company Limited (NNPCL), which included the dismissal of their managing directors.
These refineries have gulped billions of dollars over successive administrations, yet they remain largely unproductive. Oil marketers now rely heavily on the Dangote Refinery to meet fuel demand, highlighting the chronic underperformance of government-owned facilities.
The ICIR reports that the new NNPCL leadership appointed after President Bola Tinubu dissolved the board in April has removed the managing directors of the three refineries, along with other senior officials close to retirement.
Oil sector governance expert Henry Ademola Adigun told The ICIR the changes are aimed at increasing efficiency. He urged the government to go further by removing the refineries from NNPCL’s books, describing them as “dead assets.”
“When you have a new management in place, they look at where they can strengthen and in strengthening those areas, they bring in more efficiency. The officials who are retired are almost sixty years old. The reason is more likely about finding new heads and putting the sector on the track of development,” Adigun, told The ICIR.
Adigun believes they were retired for “operational reasons” with a core focus on increasing operational efficiency in the sector.
He also stressed the importance of the national oil company dealing with dead assets and selling off the nation’s three aforementioned refineries, adding that, “every past government in power who had attempted to manage those dead assets like our three refineries have failed. If we are ready for reform, we must take a step further in getting rid of dead assets off our books.”
“What I think they need to do is to look at dead assets primarily, get rid of them from NNPCL books and get someone to manage those assets, as it’s almost given that the national oil company cannot manage dead assets,” he emphasised.
It would be noted that the move by the new management team at the state-owned oil firm came following President Bola Tinubu’s removal and replacement of the NNPCL board.
Tinubu had, on Wednesday, April 2, sacked the former NNPC Group chief executive officer (GCEO), Mele Kyari, along with board chairman Pius Akinyelure and other board members.
He replaced Kyari with Bashir Ojulari and appointed Ahmadu Musa Kida as the non-executive chairman.
The President’s move saw the complete overhaul of the 11-member board of NNPCL, replaced with new members.
Tinubu, who invoked Section 59(2) of the Petroleum Industry Act (PIA) 2021, said the decision became necessary to enhance operational efficiency, restore investor confidence, boost local content, and advance gas commercialisation and diversification.
He directed the new board to conduct a strategic portfolio review of NNPCL-operated and joint venture assets to align them with value maximisation objectives.
The tales of Nigeria’s crude oil output have remained worrisome over the years as the country has not been meeting its operational quota prescribed by the Organisation of Petroleum Exporting Countries (OPEC) and has been far away from meeting its budgetary benchmark every year.
Informed sources said Tinubu wants the new board to elevate NNPC’s share of crude oil refining output to two million barrels per day by 2027 and to reach five million by 2030.
The latest shakeup swept the managers of the Port Harcourt Refining Company, Warri Refining and Petrochemical Company, and the Kaduna Refining and Petrochemical Company came following the cleanup at the NNPCL and its subsidiaries.
The ICIR gathered that the three MDs of the refineries and some other senior managers had been asked to leave.
The continued poor performance of the refineries is said to have contributed to the exit of the managing directors.
Although the Port Harcourt and Warri refineries were recently said to have been revamped, there are reports that the refineries have not been functioning effectively, having been moribund for decades.
A report on Tuesday, April 29, citing a document on the midstream and downstream sector from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) spotlighted the NNPCL to be under fire over the $897 million Warri refinery revamp.
It also revealed that the Port Harcourt refinery had been struggling at under 40 per cent production capacity.
Meanwhile, industry experts have been questioning the operational integrity of the NNPCL regarding its transparency, efficiency, and overall management of the nation’s refineries under its purview.
The ICIR also reported recently that the Federal Government has revealed plans to carry out a forensic audit of the NNPCL to promote operational efficiency and address misappropriation claims.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, hinted at this at the Nigerian investor forum, held on the sidelines of the International Monetary Fund (IMF)/World Bank Spring Meetings in Washington, DC, last week.
