House of Reps issues 7-day ultimatum to Petroleum Minister, NNPC Gmd, others over refineries

The House of Representatives Ad hoc Committee investigating the state of refineries in Nigeria has issued a 7-day ultimatum to the Minister of State for Petroleum to appear before the committee or risk the wrath of the law.

Also, to appear alongside the minister before the committee are the Group Managing Director (GMD) of the Nigerian National Petroleum Company (NNPC) Limited and the Chief Executive Officers of the Port Harcourt, Warri and Kaduna refineries.

The ultimatum was issued by the Chairman of the committee, Rep. Ganiyu Abiodun, at a press conference on Thursday in Abuja.

Why the ultimatum was issued

Abiodun said that the committee was forced to issue the ultimatum following the failure of the officials to honour three invitations earlier sent to them.

The lawmaker said, “We are compelled to hold this press conference because of the continued refusal and flagrant disregard of the GMD of the NNPC, the minister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries to the invitations to appear before the committee.

“We consider this continued refusal and negligence to appear before the committee as disrespect to the Leadership of the National Assembly of the Federal Republic of Nigeria.

“The committee is worried that the Port Harcourt Refining Company (PHRC), Warri Refinery and Petrochemicals Company (WRPC) and Kaduna Refinery and Petrochemicals Company (KRPC) had all been operating at gross losses since 2010 before they were finally shut down in 2019.

“This committee has the mandate of the house of representatives and the constitutional responsibility to demand accountability from those in positions of managing our resources.

“It is worrisome that the GMD of the NNPC, the minister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries have refused on three invitations to appear before the committee to account for the billions of dollars spent on the rehabilitation of the refineries over the years.

“As chairman of this honourable committee, I hereby summon the GMD of the NNPC, the minister of state for petroleum resources and the general managers of Port Harcourt, Warri and Kaduna refineries to appear before the committee on Thursday, April 28, 2022 to avoid legal, constitutional and parliamentary measures to be taken against them in order to compel them to appear.’’

Committee seeks to determine the actual rehabilitation cost for these refineries

Abiodun noted that the committee was aware that the NNPC recently awarded contracts for the rehabilitation of these refineries at the sum of $1.5 billion for the Port Harcourt refinery, $900 million for the Warri refinery and $1.3 billion for the Kaduna refinery.

He recalled that the committee was constituted to determine the actual cost of rehabilitating the refineries and what was needed to bring them back to maximum refining capacity.

He said the committee requested the GMD of the NNPC to provide a status report on the nation’s refineries and the actual cost of rehabilitating the refineries from 2012 to date.

Abiodun said, “The committee specifically requested the GMD to provide the following; an appraisal of the current state of refineries in the Country: Port Harcourt Refining Company (PHRC); Warri Refining and Petrochemical Company Limited (WRPC) and Kaduna Refining and Petrochemical Company Limited (KRPC) from year 2012 to date.

“Copies of annual budgets on rehabilitation by the refineries: PHRC, WRPC and KRPC from 2012 to date and a list of approvals/fund releases for rehabilitation of refineries from 2012 to date.

“List of all contracts awarded for rehabilitation of refineries and award letters issued to service providers and contractors and the Actual Cost of Projects (Contracts) and Review (if any) stated in Naira.

“Work Completion Certificates issued on rehabilitation projects carried out on refineries, evidence of payments made for all such contracts awarded from year 2012 to date.

“List of service providers and contractors that handled the rehabilitation of refineries and any other relevant information to assist the Committee in the course of this assignment.’’

What you should know

NNPC had on April 6, 2021, signed an Engineering, Procurement & Construction (EPC) contract with Tecnimont SpA, a subsidiary of Maire Tecnimont for the rehabilitation of Port Harcourt Refining Company.
The NNPC while giving the reason the Federal Government is spending the huge sum of $1.5 billion on the Port Harcourt refinery despite public criticism, said that the funds approved for the 210,000 barrels per day capacity refinery was for complete rehabilitation and not turnaround maintenance.
Also, the Federal Executive Council (FEC) had in August 2021, approved the sum of $1.4 billion for the rehabilitation of Warri and Kaduna refineries.
These expenditures had drawn a lot of criticism from Nigerians who expressed doubts over the high maintenance cost and the government’s transparency towards the project. They also expressed their disapproval of the Federal Government’s decision to spend such a huge sum of money on an asset that they eventually plan to privatize.
Nigeria has 4 refineries in Kaduna, Warri and 2 in Port Harcourt. But all have struggled to function optimally as the country continues to import petroleum products.