Nigerian National Petroleum Corporation has said it had engaged the services of Nigerian engineers to rehabilitate the country’s three ailing refineries at a cost of $550m (N99bn) compared to the $1.6bn (N288bn) presented to it by foreign contractors.
The refineries are the Port Harcourt Refining Company, Kaduna Refining and Petrochemical Company Limited.
Group Executive Director, Refining and Petrochemicals, NNPC, Mr. Ian Udoh who spoke during a press briefing organised by the corporation on the PriceWaterhouseCoopers report said “For the three refineries, the estimates going with the nominees of the original builders of the refineries would have come up to $1.6bn. But we can’t afford that because we are not going to get any funding from the government for that.
“We examined the work scope and picked up the essential things that we must do to get these refineries to operate optimally at around 90 per cent of capacity. That was done and we did the pricing template; not the international rates, we used the local rates. And everything for the three refineries combined came to around $550m, which is significant, maybe up to 70 per cent reduction.
“Even the $550m is quite much. So, we amortised it over 18 months so that we will be able to swallow it in bits more easily. The 18 months started since last October and this means that early next year, the refineries should be in shape.”
Udoh added that “A new pact had to be taken, which is more affordable for the NNPC, that is, to rehabilitate all the refineries simultaneously, resorting more to what is locally available. And these include the in-house engineers and such contractors that have been working with us all these years who are familiar with the plant.
“Part of that plan is that if there is any challenging big equipment, we resort to the original manufacturers to send a representative to join our engineers on the ground to carry out whatever is needed to be done.”
The Group Managing Director, NNPC, Dr. Joseph Dawha also added that $1.48bn, which PwC directed it to return to the Federation Account was the balance of the book value of the divested assets that were transferred to the Nigerian Petroleum Development Company.
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