The business of messing with pipelines is over, says Kachikwu

Emmanuel Kachikwu, group managing director of the Nigerian National Petroleum Corporation (NNPC), says the days of pipeline vandalisation in the country are over.

Addressing journalists in Kaduna after a tour of the Kaduna Refining Petrochemical Company (KRPC) on Wednesday,  Kachikwu said the federal government was considering the establishment of new refineries for optimal performance of the oil sector.

He said the NNPC was working to get refineries across the country to work to their optimal production.

“As you are aware, we are working with the security forces to enhance the Warri to Kaduna points and they have been tested now for integrity and I think by my understanding of the last testing is that is fairly okay now to take control if the FCC units are working,” he said.

“So on a short-term basis, we have been able to deal with that medium-term basis; we are going to work with the security agencies to ensure that the sort of destruction you find on pipeline,s not just from Warri to Kaduna, but the whole country, becomes a thing of the past.

“We are working on a very enhanced, very robust, very accelerated programme with the security forces to deal with that.

“We are trying everything that we can to do it and we are sending a body language that the business of messing around with the pipelines is over and I think the message is going round as loud as ever.”

He expressed the need for the construction of new refineries, lamenting the state of most of the current ones.

“Obviously, we need new modules because with this modules, it won’t get us very rapidly,” he said.

“What is obtainable is that most of our refineries are close to 30 to 40 years old; we need to begin to look at building new refineries in the same land space where they can share facilities so that you will have something to lean on when these old ones are beginning to kick out.

“We need to sit down and see what modules. How do you turn around the new refinery? How do you work on emergency basis components of the ones that are there.

“Without them we are not going to get out of problems of fuel supply, power supply and all that. So we are going to have a whole commercial structure, a whole engineering structure; a lot needs to be done different from models we are pursuing right now.”

He reiterated the commitment of the NNPC management to ensuring that within the next 90 days, some elements of the KRPC plant would work the way they would be expected.

On the issue of crude oil swap deals, he said the essence of the swap cancellation was that the company was saving over $200 million by virtue of doing that.

“You have transparency in the deal per month and you have transparency that embedded in those processes,” he said.

Kachikwu said that sufficiency and issue of efficiency had nothing to do with canceling or non canceling crude swaps.

“You use discretion by whoever is making decision in terms of allocation. We can leave trading and focus on what is more important in the oil industry. I can assure you that there are structures put in place.

“You will get product the way you need it. We are working on that. Even though we have canceled swap, you are going to have replacement swap contract lined along very efficient and very transparent processes that will save us lot of money.

“The refineries are not working to global best practice right now; they are all down, so what are we talking about global practices. We are dealing with major situation where pipelines have perpetually tools for destruction.”