The senate has resolved that plans by the Ministry of Petroleum Resources to concession the Port Harcourt refinery to AGIP or Oando should be suspended, while an ad-hoc committee will be set up to look into the concession arrangement.

The decision of the lawmakers followed a motion sponsored by Jigawa State legislator, Sabo Mohammed, during Tuesday’s proceedings on the floor of the Senate.

Mohammed said: “The federal government recently entered into an agreement with Nigerian Agip Oil Company (NAOC), a subsidiary of ENI, an Italian oilgiant to construct a $15 billion refinery in the Niger Delta region, a deal which also includes investment by Agip in a power plant with the Italian company assisting Nigeria in the repairs of the Port Harcourt refinery.

“The minister of state for petroleum resources stated that the agreement was part of a broader federal government plan to increase capacity for local production and consumption of petroleum products with the aim of ending fuel importation in Nigeria by 2019.

“While the resolve by the federal government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter.”

The lawmaker, however, added that another oil company, Oando, has also claimed it has approval by the federal government to be part of the deal in partnership with AGIP.

“This development would have been wonderful because it would mean an end to importation of refined products by the year 2020, but many questions are begging for answers, such as is it Agip/ENI or Oando Plc that is taking over Port Harcourt Refinery?” Mohammed asked.

“Was there the observance of the privatisation law as regards due diligence, selection from preferred bidders before ceding of the Port Harcourt Refinery to Agip/Oando?”

Mohammed also noted that the three refineries in the country, namely the Port Harcourt, Warri and Kaduna refineries are currently functioning at less than 50 percent capacity despite the promises by the Minister of Petroleum resources, lbe Kachukwu that they would be producing at 90 percent capacity by the end of 2015.

Senate President Bukola Saraki then put the motion to a voice vote and majority of the lawmakers voted that the concession process be put on hold.