There are indications that the Federal Government will sell two of its three crude oil refineries that are found to have become commercially unviable as part of measures to boost the nation’s refining sector.

The two refineries likely to be sold, according to a report of the Nigerian National Petroleum Corporation obtained by our correspondent on Friday, are the Warri Refining and Petrochemical Company and the Kaduna Refining and Petrochemical Company

The NNPC said last week that the consolidated capacity utilisation of the three government-owned refineries dropped to 23.09 per cent in May, from 24.59 per cent in April.



The third refinery being managed by the NNPC is the Port Harcourt Refining Company.

Although the Ministry of Petroleum Resources, in the new National Petroleum Policy approved by the Federal Executive Council, said the government aimed to make the refineries successful and commercially viable enterprises, it stressed that government was ready to sell any of them that failed to meet respond promptly.

It said, “They will be encouraged to become so and will be supported as much as it is within the government’s ability to do so. Each refinery will be given a transition period in which to set themselves up on their own feet.

“Ultimately though, if a refinery fails to make the transition and become commercially viable, the petroleum policy is for the government to divest (sell off), grant a concession or if necessary, close down any non-performing government-owned refinery. In either instance, the site may be handed over to a suitably qualified private sector developer to build a new refinery facility on the same site.”

According to the policy document, of the three NNPC refineries, Port Harcourt is expected to be the best place to succeed.

It said, “It has installed its own independent gas-fired power supply; it has undertaken its own turnaround maintenance; it is close to jetties and the pipeline length from crude oil suppliers is short (less of a pipeline security risk), and it is operationally ready to produce refined products to international standards, although the cost structure is still not right.

“Of the three, Kaduna is perhaps the least ready currently because of its distance from crude oil supplies and reliance on a poorly maintained crude oil pipeline.”

The government described a strong refining sector as a basic requirement for the achievement of the vision of converting the nation’s economy from a crude oil export to an oil product and derivative value-added economy.

It said without strong, high volume and commercially viable refineries within the country, the whole vision would not be achievable.

The government noted that the refineries had been underperforming for many years, stressing the need for the refining sector to undergo fundamental reform so that it could play its central part in economic development.

According to the policy document, steps that the government will take to encourage the development of a viable refining sector in the country include making the NNPC refineries become autonomous profit centres and returning storage depot assets to the refineries.

It said under the restructuring of the NNPC, the refineries would be set up as independent profit centres with responsibility for their own commercial operations.

The government noted that the storage depots were originally part of the refineries but had been subsequently transferred from the refineries to Pipeline and Product Marketing Company.

It said, “This arrangement is not considered to have been successful. The PPMC has failed to manage the depots effectively and the refineries have been denied an important part of their assets. The storage depots will, therefore, be returned to the refineries.

“In addition, the perimeter fence around the refineries will be set sufficiently far from the operations including depots to ensure that proper security can be maintained. Everything inside the perimeter fence will belong to the refinery solely and will be on each refinery’s asset register.”

The government said as part of their new independence, each of the refineries would be given commercial autonomy, meaning that they would be free to take crude oil from wherever they could get it.


http://punchng.com/fg-may-sell-warri-kaduna-refineries/

Very good initiative.

Some of these govt-owned parastatals need to be privately managed for better efficiency.

A situation where a condition for productivity of staff members is determined by some kick backs rather than improved remuneration is not acceptable.

Let private hands handle those parastatals where profit-oriented owners will closely monitor their businesses, at least, no idiot will accuse them of marginalisation on their workforce.

Nigeeriaah jagajaga...everything scatter scatter...



(in eedris abdukareems voice)

Then why expended all those money on it

We should have sale it outrightly from the time of accessment

Why allow some party chieftain makes some dough on TAM and consultancy ?

good.

hucienda:


In this moment, you are thinking logically devoid obvious partisan sentiments.

Baba I am a patriot

I love pmb no doubt

Its a personal thing

For looters I don't care about them be either the party ,religious affiliation or tribe

roadsta:
good.

Please elaborate why is it good

Let's learn from you

Nupeng / Pengassan Strike loading

moderatedguy:
Nupeng / Pengassan Strike loading

strike over refineries that are not functional. Nigerians are already buying pms at 145, it can't get any worse than it already is

Nigeria is a zoo. Lemme come n be going mbok

Nigeria must sell those refineries to those with the right expertise to manage it cos its management has been a conduit pipe for looting.

sarrki:
Then why expended all those money on it

We should have sale it outrightly from the time of accessment

Why allow some party chieftain makes some dough on TAM and consultancy ?

in business you have to put your commodity in good condition to get a better bargain in the market, if its not functional then its a scrap.

.

Kokanye!!!, how can a reasonable government build refinery in the north that has been cursed from having oil field ehn? Sell those scrap sites biko.

if they like

Who refineries epp

After spending billions on them now they finally decided to sell out

This is serious.

just like phcn, having spent billions on power, government still paid them billions as bail-out.

now it is refineries, after spending billions to ensure they were functioning in-line with buhari campaign promises, now they want it sold.

just watch out for the company that will eventually acquire the refineries from the government.

abokis are likely positioning themselves incase of eventuall disintegration of the nation

Sell everything and Tax everything. Lazy managers.

The best would have been to sell 49% of its share to the public and 51% to core investors.

hucienda:


In this moment, you are thinking logically devoid obvious partisan sentiments.

The nigga is suffering from identity disorder. It's a very rare condition.

YourImaginaryBF:
strike over refineries that are not functional. Nigerians are already buying pms at 145, it can't get any worse than it already is

It can...and it would.

OBJ sold them in 2007. Yar Adua reversed it. Outright sale or concession is the way to go.

Yorubas are on standby to buy them.

ukeme200:
Nigeria is a zoo. Lemme come n be going mbok

If Nigeria is a zoo then you must be an animal living in the zoo. Not until you have your Biafra you remain an animal.

Rubbish, I'll believe this when it actually happens! Nigerian governments love to talk up things like this without following up with concrete actions.

They should have sold these obsolete money-sinks years ago, instead of throwing ever greater sums of money down the drain in the name of a bogus "turn around maintenance" which was just another cover for looting. Sell the useless things for scrap if need be, and completely deregulate the sector, and within 2 years most Nigerians will have even forgotten these old pieces of junk called government refineries ever existed. If people can make money running illegal refineries in the creeks now, imagine how much more profitably the business could be run if legalized.

Them wan sell before disintegration abi?

this one sweet me

Sunky200:
just like phcn, having spent billions on power, government still paid them billions as bail-out.

now it is refineries, after spending billions to ensure they were functioning in-line with buhari campaign promises, now they want it sold.

just watch out for the company that will eventually acquire the refineries from the government.

abokis are likely positioning themselves incase of eventuall disintegration of the nation

BabaRamota1980:
Yorubas are on standby to buy them.

Excuse me , are you all paupers in Igbo land ? Why don't you ask Tompolo , Asari Dokubo and your other mouthy warriors including THE THIEVES like denziani to purchase them ? must you blame the north and south west for your woes ??


Is Drug business and oil bunkering not bringing profits anymore ?

Hello Zoo Chimpanzee

ukeme200:
Nigeria is a zoo. Lemme come n be going mbok

May or will sell.....alot of rams in this admin.