By Pius Mordi
After spending about $18 billion on the failed rehabilitation and turnaround maintenance of Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna, outrage is growing over the unclear financial implications and terms of the rehabilitation of Port Harcourt and Warri refineries.
Stakeholders and civil society organisations are incredulous that after $1.5 billion was spent under former group managing director of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, on Port Harcourt Refinery in 2022 with no barrel of crude refined, another programme characterised by opaque financial and technical arrangements is again in the works.
The latest deal to rehabilitate the Warri and Port Harcourt refineries was announced via a statement issued on Monday by the Chief Corporate Communications Officer of NNPC Ltd, Andy Odeh.
According to the statement, the MoU sets the stage for a potential Technical Equity Partnership aimed at completing outstanding work at the Port Harcourt and Warri refineries, as well as ensuring their long-term operational efficiency.
The MoU was entered into with two Chinese companies – Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co., Ltd.
With no enquiries into how up to $18 billion was spent over the past 20 to undertake turn around maintenance of the four facilities in Kaduna, Warri as well as the two in Port Harcourt, which have remained largely non-operational or operating at extremely low capacities, leading to continued dependence on imported fuel, Nigerians are sceptical about the present effort where little details are available.
Dele Oye, a former president of the Organised Private Sector of Nigeria, independently flayed the fresh arrangement.
Speaking on Arise News TV, Oye said that after conducting what he said is a due diligence exercise through his organization, the Alliance for Economic Research and Ethics, “These two companies have nothing to offer Nigeria. They have no professional experience. They have no engineering experience. They have never been in the industry to run a refinery of this magnitude.”
“Sanjiang Chemical”, Oye said, “is not an EPC (engineering, procurement, and construction) company. It is not an engineering company. They are into the downstream. They are more into chemicals. They have never run any refinery. It doesn’t have the technical competence.
It has never done any similar business. They have never rehabilitated one,” he said.
Oye was equally dismissive of the second company, Xingcheng. “That one is just a real estate company. They are into industrial parks. There is no evidence anywhere in the world where they have been involved in any refinery or run a refinery.”
Comparing the two Chinese firms against the existing refinery contractors — Technimont SBA and Saipem SBA — across key parameters, including EPC capability, crude oil refinery experience, global track record, and downstream operations, Oye said the contrast was damning.
While Technimont and Saipem were globally certified and extensively experienced, Sanjiang and Xingcheng scored nothing on the critical indices.
Former vice president Atiku echoed Oye’s observation, stating that “It is both shocking and insulting that after wasting over $2.5 billion on endless refinery rehabilitation scandals, the NNPC is once again asking Nigerians to trust another experiment built on secrecy and questionable competence.”
Atiku challenged the NNPCL to give Nigerians an insight into the details of the programme, making five demands of the oil behemoth.
These are:
* immediate publication of the full terms of the MoU;
* a transparent technical due diligence report on both firms;
* disclosure of financial commitments and liabilities expected of Nigeria;
* open competitive engagement involving globally reputable refinery operators; and
* a full legislative investigation into the billions previously spent on refinery rehabilitation without measurable results.
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While the fresh deal is being questioned, a coalition of civil society groups under the banner of the Coalition for Oil Sector Reforms and Accountability accused the NNPCL of failing to account for over $3.5 billion allegedly spent on recent rehabilitation of the refineries, even as they remain non-functional.
The coalition’s National President, Dr. Tekeme Umukoro, said the fresh agreement raised serious concerns about transparency, accountability and national energy sovereignty, especially as previous refinery rehabilitation projects had allegedly consumed billions of dollars without delivering sustainable results.
Defending the deal, the group managing director of NNPCL, Bayo Ojulari, said it is the outcome of more than six months of intensive technical and commercial engagements between NNPC and the Chinese firms.
The NNPC boss said the MoU represents a transition from traditional contractor-led rehabilitation to a more performance-driven partnership model anchored on shared risks and returns.
“This is an important step on the journey towards identifying potential technical equity partner or partners to restart and expand NNPC’s refineries, and to explore opportunities in co-located petrochemicals and gas-based industries.”
