Stakeholder faults $2bn turnover requirement for P’H refinery concession

A former Group General Manager of Planning at the defunct Nigerian National Petroleum Corporation, Babajide Soyode, has said no private operator would be ready to take over the Port Harcourt Oil Refining Company from the government for $2bn.

Soyode stated this in an interview with our correspondent in Lagos.

The chemical engineer wondered why the Nigerian National Petroleum Corporation Limited would demand that an operator must have $2bn to acquire the newly rehabilitated oil refinery.

The PUNCH reports that the NNPCL said it was seeking to engage reputable and credible operations and maintenance companies to operate and maintain the Port Harcourt Refining Company.

This, it said, was “to ensure reliability and sustainability towards meeting the nation's fuel supply and energy security obligations”.

NNPCL requested that interested companies must demonstrate “a minimum average annual turnover of at least $2bn for the financial years ending: 2019, 2020, 2021 and 2022 respectively”.

Reacting, Soyode, who is a technical consultant to the Dangote Oil Refinery, said: “Nothing is really wrong in transferring the refinery to a private operator. It depends on the terms and conditions. With the terms and conditions given, they don't want anybody to run the refinery. How will you be asking me to have $2bn to run the refinery? What is the value of the refinery that I must have $2bn? How many service companies have $2bn? I thought they were serious, they are not serious.”

The retired NNPC manager held that the Port Harcourt refinery and others owned by the government should have been upgraded instead of rehabilitation.

“There is no reason why those refineries that were among the best when we built then should have deteriorated. In fact, I must tell you, the refineries didn't deteriorate; the management deteriorated them.

“Even if the refineries are old, they can be upgraded to the latest technology. This so-called rehabilitation, let me tell you, equipment that was built in the 60s and 70s, you want to rehabilitate them, to the same state? Does it make sense?” he asked.

He advised that the government ‘moribund' refineries in Port Harcourt, Warri and Kaduna should be merged into one, while 65 per cent of the equity should be privatised.

“NNPCL should still have substantial equity, but not controlling equity. That's the only way forward. There is nothing wrong with the refineries. There are much older refineries in Houston, all over the world,” Soyode noted.