Obasanjo: Why Shell refused to invest in state-owned refineries

Former President Olusegun Obasanjo says those profiting from the lucrative industry of fuel importation will take steps to sabotage the Dangote Petroleum Refinery.

In a recent interview with the Financial Times (FT), Obasanjo spoke about his efforts to get Shell to invest in Nigeria’s refineries.

On June 23, Devakumar Edwin, vice-president, oil and gas at Dangote Industries Limited (DIL), had accused international oil companies (IOCs) in Nigeria of making efforts to frustrate the survival of the refinery.

Edwin said the IOCs were deliberately frustrating the refinery’s efforts to buy local crude by jerking up crude oil prices above the market price, thereby forcing it to import crude from the United States and Brazil.

Speaking on the issue in a recent interview with the Financial Times (FT), Obasanjo said the Dangote refinery should motivate both Nigerian and non-Nigerian investors.

“Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria,” he said.

“If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated.”

WHY SHELL REFUSED TO INVEST IN STATE-OWNED REFINERIES

Obasanjo said the running of state-owned refineries is shrouded in “corruption”.

“When I was President, I invited Shell and I said, look, come and take equity participation and run our refineries for us. They refused. They said our refineries have not been well maintained,” he said.

“We have brought amateurs rather than bringing professionals. They said there’s too much corruption with the way our refinery is run and maintained. And they didn’t want to get involved in such a mess.”

On the promises that the refineries will be fixed, he asked, “how many times have they told us that? And at what price?”

“Those problems, as far as the government refineries are concerned, have never gone. They have even increased. So if you have a problem like that and that problem is not removed then you aren’t going anywhere,” the statesman added.

The state-owned refineries have missed its deadline for completion of rehabilitation work several times.

On March 15, Mele Kyari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, had said the refinery would begin production by the end of March, but this has not happened.

Setting a new deadline, the NNPC GCEO said the refinery would begin operations in early August.

“Specific to NNPC refineries, we have spoken to a number of your committees, that it is impossible to have the Kaduna refinery come to operation before December, it will get to December, both Warri and Kaduna; but that of Portharcourt will commence production early August this year,” he said.

TheCable had reported that the presidency recently expressed concerns over the NNPC’s failure to deliver critical projects including the Port Harcourt refinery.

But in defence, Heineken Lokpobiri, minister of state for petroleum resources (oil), said such projects often take time, adding that the refinery is at its final rehabilitation stage.