‘It’s unprofitable’ — group disagrees with FG over $1.5bn for PH refinery rehabilitation

The Paradigm Leadership Support Initiative (PLSI), a civic organisation fostering public accountability in the country, says it is not profitable to expend a sum of $1.5 billion to rehabilitate the refinery in Port Harcourt, Rivers state.

Last week, the federal executive council (FEC) approved the sum at the 38th virtual FEC meeting presided over by President Muhammadu Buhari.

Timipre Sylva, minister of state for petroleum resources, said the rehabilitation of the refinery would be done in three stages.

But speaking at policy dialogue on improving efficiency and revenue of the Nigeria National Petroleum Corporation (NNPC) in Abuja on Tuesday, Olusegun Elemo, PLSI executive director, said the 2019 audit report of the NNPC has shown that the refinery is not profitable.

He said the refinery incurred a direct cost of N22 billion and it did not produce any product.

“They have been doing this turn around over and over again. There are other pressing issues, we are looking at revamping, the education section is there with it’s issues and security, it is difficult to open schools but you want to put $1.5 billion in a refinery that we are not certain,” Elemo said.

“The same Port Harcourt refinery did not generate anything in 2019. On what basis, what parameters are you using for investments? Who are the people that will run it anyway?

“The same Port Harcourt refinery that did not generate a dime in 2019 incurred a N22 billion direct cost – paying salaries, getting people to travel around. It doesn’t appear to be profitable.

“It’s clear that it is not profitable.”

Also speaking at the meeting, Madaki Ameh, a lawyer and a former official of Shell, said instead of rehabilitating the refinery a new one should be set up.

“What you are turning around when setting up a refinery is not rocket science,” Ameh said.

The lawyer said for the industry to be viable, there must be performance indicators (KPIs) and a way to hold those occupying offices to account until the Petroleum Industry Bill (PIB) is enacted.

“If we are going to expect anything from the oil and gas industry we must set key performance indicators (KPIs) and hold people accountable to make them get their work done,” he said.

“We are not in short supply of those who can run this industry. We have very competent people.”

Overtime, experts have argued that the PIB will make NNPC a viable organisation to the country.

The proposed law which has been in the works for over 10 years is expected to cause reforms in the oil and gas sector.

Some provisions of the bill include the restructuring of the NNPC and making it a public liability company.

Saudi Arabia has been able to achieve this feat with Aramaco listing on the Saudi Stock Exchange in 2019, becoming the most valuable listed company in history.