The Minister of State for Petroleum, Ibe Kachikwu, said on Saturday that the federal government decided to invite investors to handle the upgrade of the four refineries located in Port Harcourt, Warri and Kaduna because it could not afford the $700 million required to enable the facilities function at maximum capacity.
He was speaking to journalists during the re-inauguration of the Port Harcourt/Bonny Crude Supply Line at the Port Harcourt Refining Company, PHRC, Eleme, Rivers State.
“We are not inviting foreign partners to take over the refineries. The total investment for that is up to $700 million and we don’t have that. Let us be honest about it. So, the best thing to do is to find a very creative way to bring in investors, who will come in, work with our team here.
‘’Investors, who have the skills to reactivate and upgrade facilities in this place and help us provide
technical support and we will pay through the flow-out of the refined products over time,” he said.
The standard industry practice is for technical jobs like the upgrade of the refineries to be subjected to formal bidding to ensure that the very best is awarded the contract.
Bu, Mr. Kachikwu explained that there should be no confusion about what the investors would be coming to do, since they would not come to run the refineries.
”They are coming to provide funds to take our performance on these refineries to at least 90 per cent and to provide us with technical skills,” he said, adding that the investors’ areas of intervention would be funding and technical support.
He pointed out that at the moment, Nigerians were consuming about 45 million litres of premium motor spirit, PMS daily, with 12 million litres daily coming the refineries, which are producing at 60 per cent capacity.
The minister said the country would need to upgrade these refineries and allow them develop to the point where they could perform up to 90 per cent, adding that by the time the refineries were upgraded and they started producing at that level, about 20 million litres would be produced daily.
Mr. Kachikwu who is also the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, said that with such production capacity, it would only meet up with about half of the country’s consumption.
For the umpteenth time, the Minister apologised to Nigerians for their suffering due to the fuel scarcity, urging them to sustain the patience as government was working hard to resolve the crisis.
He explained that the government had been able to recover the two critical crude supply pipelines, namely Escravos/Warri and Bonny/Port Harcourt crude supply pipelines, which were repaired after being down about seven years without supplying crude to the refineries.
”For the first time, the refineries will get their crude, pay for it, they will sell their products and they will earn the income from that product.
”And then, they can develop and continue to maintain the refineries even after this intervention is over. Port Harcourt is back in production, Warri is back in production; Kaduna today is receiving and will soon be back in production. It is something of joy,” he said.
He added that the fuel scarcity in Lagos and Abuja was easing off now from, assuring that once Kaduna refinery began to produce, the northern part of the country would see a lot of improvement.
”Over and above that, we are putting long term policies in place to ensure that while smaller marketers go out and do their stuff, we can then be the key suppliers for the rest of the country.”
He commended the workers and the contractors for a job well done; adding that he has signed the promotion letters of the PHRC staff as they deserved to be rewarded.
Mr. Kachikwu, however, said a lot still needs to be done, ”I told you I will never give up.
‘We owe Nigerians the duty to ensure that the refineries are working. We owe Nigerians that, we can’t give up,” he said.
The minister urged Nigerians to remain resilient, “support what the government is doing because this is the only way to change the system.”
(NAN)
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