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FG to sell four state-owned refineries next year

By BusinessNews Staff on November 20, 2013

The federal government plans to begin the privatisation of four of its state-owned oil refineries before the end of the first quarter of next year, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has said.

“We would like to see major infrastructure entities, such as refineries, moving out of government hands into the private sector,” Alison-Madueke said in an interview with Bloomberg TV Africa in London.

Speaking further, she said: “Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over the years.”

A presidential audit of the facilities led by a former Minister of Finance, Kalu Idika Kalu, had last year recommended the sale of the refineries due to inadequate government funding and “sub-optimal performance.”

The refineries, which have a combined capacity of 445,000 bpd, should be privatised within 18 months, according to the report submitted to President Goodluck Jonathan in November 2012.
Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC), produced 1.99 million barrels per day (bpd) of crude in October.

The refineries are 124,00bpd Warri Refinery, 60,000bpd Old Port Harcourt refinery, 150,000bpd new Port Harcourt refinery and 110,000bpd Kaduna refinery.

A previous attempt in 2007 by the Olusegun Obasanjo administration to sell the Kaduna and Warri refineries was reversed by the next government headed by the late Umaru Musa Yar’Adua.

While Nigeria is also Africa’s top crude exporter and the most populous with more than 160 million people, it relies on fuel imports to meet more than 70 per cent of its needs.

Its state-owned plants operate at a fraction of their capacity because of poor maintenance and aging equipment. The West African nation exchanges 60,000 bpd of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Cote d’ Ivoire, according to Nigerian National Petroleum Corporation (NNPC).
“We are right now undergoing a major turnaround maintenance programme of the refineries,” Alison-Madueke said.

Improvements to the two-unit, 210,000-bpd Port Harcourt refinery, the country’s biggest, would be completed by the end of the year, to be followed by enhancements at the Warri and Kaduna sites in 2014, according to the NNPC.
Warri has a processing capacity of 125,000 bpd and Kaduna, 110,000 bpd.

[This Day]

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