Nine Reasons Why Refineries’ Rehabilitation Is Justified

 

By Adewole Kehinde

It is no longer news that the Federal Executive Council on Wednesday, 17^th March, 2021 approved the sum of $1.5 billion for the rehabilitation of the Port Harcourt Refinery Company Ltd.

Unfortunately, some personalities like Former Vice President Atiku Abubakar, Gov Nyesom Wike, Activist Aisha Yesufu, Senator Dino Melaye, and Former Gov Peter Obi among others are opposing the rehabilitation/contract award. 

Below are the nine reasons why refineries’ rehabilitation is justified

1. AFTER YEARS OF NEGLECT, THE PLANTS NEED TO BE BACK

Nigeria’s three refineries in Warri, Kaduna and Port Harcourt with a combined capacity of 445,000b/d capacity were established to ensure energy security for the country. Unfortunately, these refineries have suffered years of neglect due to delays in conducting mandatory Turn Around Maintenance (TAM) that has resulted in performance decline over the past two decades and they have all been shut down to allow proper diagnosis and rehabilitation.

Of these refineries, the most strategic is the Port-Harcourt Refining Company (PHRC) with a capacity of 210,000 b/d and can produce 10.4 million liters of Premium Motor Spirit (PMS) per day. This refinery had its last TAM in the year 2000 (21 years ago).

It is gladdening therefore to see that there is finally a move on the part of government to rehabilitate the Port Harcourt refinery and restore all the numerous advantages that operating the refinery will bring to the Country. This rehabilitation, unlike TAM (which should normally be carried out every two years but was neglected for many years), will involve comprehensive repairs of the plant with significant replacement of critical equipment to ensure the plant integrity is maintained for a minimum of ten years.

2.  REHABILITATION VS BUILDING NEW REFINERIES: WHAT ECONOMICS?

Some critics have said that it is more economical to build a new refinery than “just waste US$1.5bn” to rehabilitate the PHRC, which holds 210,000bpd out of Nigeria’s 445,000bpd refining capacity. On the contrary, a cursory look at brand new refineries built across the world will reveal the following:

US$10bn was budgeted for building Aramco Oil Refinery (250,000-300,000 bpd) in Pakistan

US$12bn was budgeted for building Abrue Lima Project (230,000) in Brazil

US$27bn was budgeted for building Pengerang Refinery and Petrochemical Integrated Development, RAPID (300,000 b/d + 3 mtpa) naptha steam cracker) in Indonesia.

Closer home, US$19bn was budgeted for building Dangote Refinery (650,000bpd) in Nigeria.

3.  THE LENDER IS SMART, THE CONTRACTOR REPUTABLE

African Export-Import Bank (Afreximbank) is the reliable lender that has agreed to raise up to $1billion towards the rehabilitation project. In the same vein, Government will raise the sum of US$550m. A credible and capable lender like Afreximbank would never agree to put such huge amount of money where there will be no value.

Similarly, Tecnimont SpA, representative of the Original Refinery Builder (ORB) which is one of the top ten global Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) Contractor in refineries, is globally reputable and capable, with requisite experience of similar jobs across the globe.

4.  STRATEGIC ASSETS ARE NEVER FOR SALE

Despite the abundance of hydrocarbon resources, Nigeria is, sadly, the only oil gas producer in the world that does not refine petroleum products. Instead, the country relies heavily on importation for most of its PMS needs locally. This is not a good record to be proud of.

Armchair critics also come up with a shallow argument that it is better to sell off these refineries since they can no longer meet up the nation’s refining needs. Which country sells off its strategic national assets, such as the refineries, to the highest bidder? Who sells off their refinery when even countries who don’t produce a drop of hydrocarbon still go ahead and build refineries?

5.  THE END OF ‘BUSINESS AS USUAL’

Armchair critics usually think a mere mention of rehabilitation means another round of “business as usual”, where resources are drained with nothing to show for it at the end of the day. While some of these arguments are justifiable, it is instructive to note that this rehabilitation is different because interested parties who benefit from the age-long importation largesse (and who fleece the nation dry) will potentially be out of business by the time the rehabilitation is completed.

This is the same for critics who see nothing good in President Muhammadu Buhari’s administration. These detractors probably forgot that this was an administration which, from its inception, made clear its intention to bring back the refineries to their optimal capacities. The Buhari Presidency also threw its full weight and support behind the NNPC and gave the Corporation a free hand to execute the project without any interference in the contracting processes.

6. THE BENEFITS ARE ENORMOUS…AND ENDLESS

There are quite a number of benefits in bringing the nation’s refineries back on stream. From satisfying local energy demand, growing the nation’s GDP, to strengthening the Naira by reducing the demand for Forex to creating thousands of jobs across the value chain (crude supply, operating and maintaining the refinery, product supply etc) including several third-party contractors that will supply outsourced services or goods, the advantages are huge.

The refined products also serve as feedstock for small scale local manufacturing. The most significant and visible benefit is energy security for the country. Imagine if COVID-19 lockdown became global and Nigeria couldn’t import, it would have been a disaster as there was no capacity to refine crude in-country and as such, there would have been no products at all. That will be a true definition of disaster!

7. IT’S OPERATE & MAINTAIN (O&M) MODEL.

Having learnt from the experiences of previous models, NNPC is now adopting the Operate & Maintain (O&M) Model as a strategy in the execution of the rehabilitation project, which is also one of the key lender requirements. With the O&M Strategy, the Contractor is expected to:

• Be a single point of responsibility for managing operations, maintenance and technical services within the refinery’s battery limit

• Be a credible, proven refinery operator with preferably FCC experience

• Operate and maintain the refinery efficiently to generate sufficient margins to pay back the debt

• Be Able to manage local and specialized sub-contractors

• Retain current NNPC staff, and actively support employee development to prepare for the transfer of the refinery management back to NNPC (timeline to be defined)

• NNPC will retain 100% of refinery ownership (e.g. no JV structure etc.)

• NNPC does not expect significant capital projects (e.g. upgrades, de-bottlenecking etc) during the O&M contract phase.

• NNPC’s structure and mandates outside of the refinery’s battery limits will not be impacted by the O&M strategy (e.g. PPMC).

8. THE CURIOUS CASE OF SHELL’S MARTINEZ REFINERY ‘SALE’

It is strange to hear people come up with the curious case of Shell’s sale of its Martinez Refinery in California to PBF Holding for $1.2bn “while NNPC is only rehabilitating PHRC for $1.5bn.” Perhaps, what people failed to understand is that Martinez Refinery is 105years old (built in 1916). The refinery had a major fire incident in September 1989 and it is having regulatory challenge with the Californian authorities. The relatively high cost of doing business in California, coupled with challenges with adherence to the State’s environmental regulations were factors in Shell’s decision to sell (https://www.ktvu.com/news/after-105-years-martinez-refinery-no-longer-owned-by-shell).

Also, as part of the condition of the sale agreement, Shell and PBF previously entered into a market-based crude oil supply and product off-take agreements to continue supplying Shell-branded businesses and ensuring that Shell customers continue having access to Shell-branded fields (See https://www.ogj.com/refining-processing/article/14092900/shell-finalizes-sale-of-martinez-refinery).

In a nutshell therefore, what happened between Shell and PBF was just a Management agreement packaged as a sale to manage and protect Shell’s image, hence, it can never be a fair comparison with the cost of rehabilitating an NNPC refinery or even building a new one. Putting up such argument as a defence looks like a well-choreographed attempt by groups who feel that the refineries coming on stream will not only throw them out of business, but will also threaten their long-term interests.

9.  FINALLY, AN ENTIRELY DIFFERENT APPROACH THIS TIME AROUND 

Unlike what is obtained in the past, the current refineries rehabilitation project is different for the following reasons:

a. It consists of a governance structure that includes key independent external stakeholders: Ministry of Finance, NEITI, ICRC, PENGASSAN and NUPENG. 

b.        Unlike the regular TAM, this rehabilitation will involve comprehensive repairs of the plant with significant replacement of critical equipment to ensure that the plant’s integrity is maintained for a minimum of ten years.

c.         It is funded through part-loan and part-government, with the financiers actively monitoring the execution of the project.

d.        KBR and NETCO are acting as NNPC Engineers who will be supervising the EPC contract to ensure that the project is delivered on schedule, within budget and at the right quality.

 

Adewole Kehinde is the publisher of Swift Reporters and can be reached via 08166240846, 08123608662

Coalition Asks Kwankwaso, El-Rufai, Tambuwal, Fayemi, Tinubu, Osibanjo, Amaechi, Jonathan And Others To Keep Away From 2023 Presidential Race

The Centre for Credible Leadership & Citizens Awareness has asked individuals like Rabiu Kwankwaso, Aliyu Magatakarda Wamakko, Mallam Nasir El-Rufai, Governor Aminu Tambuwal, Governor Kayode Fayemi, Ahmed Bola Tinubu, Vice President Yemi Osibanjo, Rotimi Chibuike Amaechi, Godswill Akpabio, Goodluck Ebele Jonathan and others in the interest of the cooperate existence of the Nigerian State, to keep away from the 2023 Presidential Race.

This was disclosed on Monday 15th March 2021 by the Director General, Centre for Credible Leadership & Citizens Awareness, Dr. Nwambu Gabriel. He said that in the interest of equity and fairness, its becomes imperative that the two major political parties in Nigeria; APC and PDP choose their candidates from these three geo-political zones that haven’t had the opportunity of producing the President in Nigeria.

The coalition also calls on individuals like Rabiu Kwankwaso, Aliyu Magatakarda Wamakko, Mallam Nasir El-Rufai, Governor Aminu Tambuwal, Governor Kayode Fayemi, Ahmed Bola Tinubu, Vice President Yemi Osibanjo, Rotimi Chibuike Amaechi, Godswill Akpabio, Goodluck Ebele Jonathan and others to keep away from the 2023 Presidential race in order to give an atmosphere of peaceful cohesion.

Excerpt is the full text of the statement:

There is no doubt that the peaceful coexistence of Nigeria is already threatened and fragile. Politics in Nigeria is deemed by politicians as purely a game of personal interest. In other words, the word patriotism scarcely exists in the minds of our elites. This explains why the socio-economic and political situation in the country has consistently nose-dived.

Now, Nigeria is made up of six (6) Geo Political Zones. These are the North East, North West, North Central, South East, South South and the South West. Since the return of uninterrupted democracy in Nigeria in 1999, the South West took off with former President Olusegun Obasanjo completing the 2 term of 8 years. He handed over to the North West under late President Musa Yar’Adua who barely served for 2 years before death struck. This prompted the swear-in of the South South born Ebele Goodluck Jonathan. Thereafter in 2015, the North West took over with President Mohammadu Buhari of the North West region while Yemi Osibanjo of the South West is serving as the Vice President. In all these therefore, the North Central, the South East, and the North East has not held sway as President of this great nation. In the interest of equity and fairness, its becomes imperative that the two major political parties in Nigeria, that is, the APC and the PDP choose their candidates from these 3 geo political zones that haven’t had the opportunity of producing the President in Nigeria. This formula would stabilize the already tensed situation and enhance the peaceful coexistence of Nigerians across board.

In the interest of Federal character, individuals like Rabiu Kwankwaso, Aliyu Magatakarda Wamakko, Mallam El-Rufai, Governor Tambowal, Governor Kayode, Ahmed Bola Tinubu, Vice President Yemi Osibanjo, Chibuike Amaechi, Godswill Akpabio, Goodluck Ebele Jonathan, etc. should keep away from this race in order to give an atmosphere of peaceful cohesion.

We hereby advice that this formula remains a panacea to solving the myriads of problems associated with the uneasy calm currently experienced in the country and should rank top in the mind of any patriotic Nigerian. The Nigerian Nation is more important than any parochial or ethnic sentiment likely to plunge the Nation into jeopardy.

Cross River North Senatorial District Election: Group Slam INEC Chairman

 

……… Cautions Gov Nyesom Wike

The Network of Democratic Watchdogs of Nigeria has accused the INEC Chairman, Mahmood Yakubu in the Cross River North Senatorial District Election crisis.

This was disclosed on Monday, 15^th March, 2021 by the Network Coordinator, Comrade Chijioke Onyekaonwu, during a press briefing in Abuja.

“According to Section 285(13) of the 1999 constitution as amended. It states No tribunal or court shall declare anybody winner of an election when he has not participated in all the various stages of election. Did INEC have the name of Hon. Jarigbe on the list of candidates for the senatorial by-election on 5th December? These are pertinent questions and Nigerians demand answers, Comrade Chijioke Onyekaonwu said.

He went further, “We are not unaware of the relationship between Gov Nyesom Wike and the INEC chairman dating back to many years of close affiliation. Wike should face the task of governing Rivers state and desist from stirring trouble all over the country.

Excerpt is the full text of the press statement:

The defense of our democracy is not only sacrosanct but a responsibility for all men of good will. It is a fact of reality if I say that the survival of our nascent democracy will be highly jeopardized if the electioneering process is marred by Corruption, deceit, and bribery thereby breeding injustice and political instability. The election management is agreeably the most sensitive process in a democracy and it is expected that the umpire shouldered with such important and sensitive responsibility must have transparency and rule of law as his or her beacon. This is in order to produce a credible outcome or result.

The Cross River North senatorial district election held on December 5th 2020 will stand out as dark era in the annals of election conduction in Nigeria. The INEC involvement and actions in the said election amounts to a total decampment from the electoral process and is nothing short of standing the electoral law on its head. The PDP primaries for the December 5th election was held on November 5th according to the provisions of the electoral act. The primary election was held and all requirements according to the electoral provisions were put in place including the presence of the INEC chief observe and the local government EOs. The party electorates voted overwhelmingly to elect Senator Stephen Adi Odey as winner. The closest runner up with a high margin Hon Jarigbe Agom on sensing his loss walked away before the end of the election. His exit notwithstanding, the party concluded the primaries with Senator Stephen Adi Odeys declared winner and his name was duly submitted to INEC. Hon Jarigbe exercising his legal right challenged the outcome of the primaries in a federal high court in Calabar and on December 3th 2020 the court struck out his claims as lacking merit. The INEC was compelled by this to issue Senator Adi Odey a form EC9 which he filled swore to and returned to INEC via the party.

The senatorial election was held on the 5th December 2020 and after the election, Senator Stephen Odey came out on top with a high margin and a total vote of 129,207 to beat his closest rival Joe Agi the APC candidate who scored 19,165 votes and Subsequently, INEC issued Senator Adi Odey with a certificate of return. The intrigues and desperation of INEC and Hon Jarigbe did not end with the election as they in connivance with one chief John Alaga, a close friend of Hon Jarigbe who now filed an isolated matter in FCT High Court Abuja purportedly to challenge the qualification of Hon Jarigbe whom he mischievously referred to as the winner of the primaries in the motion, stating that his certificates are questionable and as such not qualified to run for the election. The court ignorant of the real status of Hon Jarigbe and treating the matter on its face value dismissed the certificate issue as it was not proved beyond reasonable doubt intentionally by the conspiring ally Chief Alaga. INEC in an open bias and acting in grievous error hurriedly issued another certificate of return to Hon Jarigbe without recourse to their election records. It is worthy to note that neither Senator Stephen Odey nor the PDP was joined as parties in the said suit.

This unfolding comic drama being directed by the INEC Chairman has in its characters a stranger with a strange interest, how else will one describe the sudden interest of Gov Nyesom Wike in the internal politics of Cross River North

Senatorial district? The enormous size of blunder presently going on display is an indication that an equivalent size in sum is passing as bribe under the table. It is obvious where the funding for this democratic blunder is coming from. We are not unaware of the relationship between Gov Nyesom Wike and the INEC chairman dating back to many years of close affiliation. Wike should face the task of governing Rivers state and desist from stirring trouble all over the country Just to fan his Vice Presidential ambitions. He has a right to aspire to any elective position but that will not be at the detriment of societal peace and collective interest of the country.

Questions for the INEC chairman

1. Which party submitted the name of Hon Jarigbe to INEC as its candidate for the 5th December 2020 by-election as required by the electoral act?

2. Did Hon Jarigbe fill any form EC9 as mandated by section 31 of the electoral law?

3. According to section 285(13) of the 1999 constitution as amended. It states No tribunal or court shall declare anybody winner of an election when he has not participated in all the various stages of election. Did INEC have the name of Hon

Jarigbe on the list of candidates for the senatorial by-election on 5th December? These are pertinent questions and Nigerians demand answers.

The instrument which is being peddled by Hon Jarigbe is a strange court judgment obtained in an isolated matter between him and his friend chief Alaga that has no relationship with the senatorial election won by Senator Stephen Odey or the primaries as conducted by the PDP for that election. The court order is obtained in a case between Hon Jarigbe and Chief John Alaga without PDP or the election winner Senator Stephen Odey being joined as parties. There is no judgment or order of court issued by any court anywhere in Nigeria nullifying the position and candidacy of Senator Stephen Odey. I challenge anyone to produce such order or judgement. All the judgement so far declared in this matter both at the High Court and the Court of Appeal were all in favor of Senator Stephen Odey and both judgements are subsisting. There has not been any counter judgment from any court in the contrary. No court at any level ordered INEC to issue Hon Jarigbe with a certificate of return nor did any court direct that Hon Jarigbe should be sworn in as the senator representing cross river north senatorial district. Hon Jarigbe on national television yesterday 14th march 2020 told the whole country that he has secured his swearing in for Tuesday 16th march, as according to him, he has his report sitting at the senate presidents table. His statement further indicates his desperation and connivance with some dark forces to truncate our democratic gains and values in the national assembly. Any action by INEC or anybody based on the purported judgment is tantamount to usurping the power of the judiciary and a recipe for anarchy.

This rascality and open bias by INEC in this matter can only mean one thing, that a personal interest is trying to override a public interest and we as watchdogs of democracy cannot sit by and watch democratic principles truncated by anyone no matter how highly placed. We demand that the INEC Chairman should retrace his steps in his present action of subversion of justice. We also demand that that a high level commission of enquiry be set up to measure the culpability of the INEC personnel involved in this.  This action has become a source of international embarrassment to our electoral system, and our nation at large.

We commend the resilience, transparency and commitment of the senate president Ahmed Lawan, Ph.D and the principle officers of the 9th senate for standing for justice and rule of law at this point of our democratic history. The senate president’s dismissal and refusal to implement the demands of Hon Jarigbe is an indication of strength of character and patriotism. Posterity will remember you for standing with the people in our country’s quest for democratic excellence.

Finally, we call on Senator Stephen Odey to disregard the distractions and actions of Hon Jarigbe and INEC and concentrate on his duty of giving the Cross river north senatorial district the excellent representation they deserve.

Coalition Says The Supreme Court Did Not Nullify The Certificate Of Return Of Senator Steve Odey

 

The Centre for Credible Leadership & Citizens Awareness has corrected the wrong speculations in the media space that the Supreme Court nullified the election of Senator Steve Odey.

Speaking to journalists on Monday in Abuja, the Director General of Centre for Credible Leadership & Citizens Awareness, Dr. Nwambu Gabriel, said that the Supreme Court did not rule on the substantive appeal of the matter, instead, it ruled on preliminary objection about improper service by substituted means, whereas, the same Supreme Court granted an order that the parties be served via substituted mean and all the parties were in court.

“The Supreme Court did not nullify the certificate of return of the serving senator, Dr. Odey, neither was the seat declared vacant. In other words, it is pertinent to also state clearly that the Supreme Court did not sack Dr. Odey. Of course such powers do not reside with the Supreme Court. It is the election Tribunal which can rule on such matters before it currently, Dr. Nwambu said.

The coalition said it has pondered on the entire matter and even wondered if the Judiciary is really the hope of the common man consequent to some observations in the Supreme Court on the 25th of February, 2021.

The statement read “The situation here is very clear. Section 285 (13) of the 1999 constitution as amended clearly state “that no tribunal or court shall declare any person winner of an election when he has not participated in all the stages of that election”.

"Two fellows are involved here. One contested an election, the other did not, but wants to truncate justice, lie on oath, deceive Judges and fraudulently obtain judgment in his favour. A situation where an individual run from one court in Port Harcourt to another in Calabar and then to the FCT High Court, all in a bid to fraudulently obtain Judgement. This is further worsened by the fact that all these courts have no Jurisdiction over the matter.

"We would then wish to ask if the Judiciary is for buying and selling. If the judiciary is for the money bags. If the judiciary is for the highest bidder? This further explains why President Mohammadu Buhari had made a genuine and concerted efforts towards reforming the Nigeria Judiciary as a formidable arm of government. Little wonder the Judiciary still tops the chat as one of the most corrupt government institutions in Nigeria.

"For us in the Civil Society, this kind of incidence where a man who did not contest election coming to contest the seat of a Senator who has been sworn-in is completely absurd. It is worse than book-haram, banditry and kidnapping put together.

"We also wondered the interest of the Governor of a state in the politics of another state. Why the gang-up? His offence; he contested and won an election…This trend definitely is not healthy for our democracy.

"By this medium we wish to commend the Principal Officers of the 9^th Senate ably led by the Senate President, Senator Ahmed Lawan, as a man of impeccable character who has demonstrated unrelenting support for our democracy for standing firm in the defence of justice in spite of so much pressure by some clandestine groups to indulge in injustice, thereby truncating the height already attained as true democrat he is. The legal department is hereby commended for insisting on legal and legitimate due process as far as the Senate is concerned. Nigerians are indeed watching with keen interest the desperate disposition of some politicians who should not be found in the corridors of power.

"Lastly, we wish to re- emphasize that Senator Dr. Steve Odey is still the Senator representing Cross River North Senatorial District as his seat was not declared vacant neither was his certificate of return nullified by any court of competent jurisdiction in Nigeria, Dr. Nwambu concluded.