The House of representatives yesterday urged the Federal Government and Nigerian National Petroleum Corporation Limited (NNPCL) to outsource the operations and maintenance of the nation’s refineries to reputable International Oil Companies (IOCs) to guarantee reliability, optimal operational availability and maximise value.
The House said, in the alternative, the government should ensure the activation of the inactive licences approved and issued to private refineries for maximum operations and competition in order to eliminate the possibilityof a monopoly in the downstream sector.
This is part of the recommendations of the Adhoc Committee on the State of Refineries set up by the House to ascertain the actual cost of rehabilitating the refineries, which was adopted at plenary by the House.
The lawmakers asked NNPCL take full advantage of the Petroleum Industry Act 2021 passed by the National Assembly to fast-track the ongoing rehabilitation of the refineries empowered by the legislative intent for a deregulated business environment and restore the refineries to minimum of utilisation.
The House directed that the Port Harcourt Refinery Phases One and Two rehabilitation should be completed on schedule to inject about 54,000 barrel and 135,000 barrel per day of refined product into the economy.
The House said the two refineries should pump a combined 189,000 barrel of refined products daily by the end of the year.
Also, it said work on the Warri Refinery should be completed on schedule to pump about 75 ppp barrel of petroleum products per day with effect from September.
The House added: “The 10th National Assembly be mandated to carry out legislative oversight on the ongoing rehabilitation to ensure that the nation achieves the expected processing capacity of 189,000 Barrels Per Day from the PHRC (54,000BSPD from OPHR+135,000BSPD from NPHR) and 75,000BSPD from WRPC plus whatever processing capacity from the Dangote Refinery, to meet the domestic needs for petroleum products by December.’’
“The 10th National Assembly should be further mandated to ensure continuous legislative oversight of the ongoing rehabilitation programme by the NNPCL at the Port Harcourt, Warri and Kaduna refineries in order to achieve project target timelines and rehabilitation of the refineries to bring them back to maximum refining capacity.
The House wants the NNPCL to immediately award contract for the rehabilitation of the Kaduna Refinery and Petrochemical Company (KRPC), while striving to achieve the 3-4-year standard regular Turn Around Maintenance (TAM) global best practice for the Refineries after the full and complete rehabilitation to ensure sustainable refinery operations and value maximization.
The House also asked the Federal Government and the NNPCL to upgrade the pipelines security architecture for maximum surveillance, protection and pipeline security to avoid incessant pipeline vandalism, ensure regular and continued crude oil feedstock supply to the refineries when fully rehabilitated and functional.
They want an end to the DSDP (Direct Supply-Direct Purchase) arrangement, removal of subsidy on Petroleum Motor Spirit (PMS), deregulate prices on the product to ensure competitiveness and provide adequate palliative measures to reduce anticipated economic impact and hardship on Nigerians and the economy.
The House said NNPCL should take responsibility for the continued failed assurances for the commencement of operations and coming on-stream of the Port Harcourt Refinery and the failure of the Contractor (Tecnimont SPA of Italy) to deliver on the contract terms and project target timelines.
The House wants the Contractor handling the rehabilitation of the Port Harcourt Refinery, Tecnimont SPA of Italy be reprimanded for the failure to deliver on the terms of contract agreement, demonstrating lack of capacity to achieve expected project target timelines, and continuous shifting the expected operational dates from December 2022 to March 2023; from March 2023 to the Second Quarter of 2023 and from Second Quarter of 2023 to now September 2023.
It asked for a forensic audit of all the rehabilitation projects in the three (3) refineries be further conducted as obvious omissions were noted in the submissions made by the NNPC, seeming duplication of projects observed and possible double payments made.