Re­finer­ies lost N111bn in nine months, says NNPC

The Punch - - FRONT PAGE - ’Femi Asu

The three re­finer­ies owned by the Fed­eral Gov­ern­ment lost a to­tal of N111.27bn from Jan­uary to Septem­ber this year, the Nige­rian Na­tional Pe­tro­leum Cor­po­ra­tion said in its Septem­ber re­port.

The re­finer­ies posted a loss of N96.31bn in the same pe­riod in 2018, ac­cord­ing to the NNPC data ob­tained by our cor­re­spon­dent on Mon­day.

Nige­ria, Africa’s top oil pro­ducer, re­lies largely on im­por­ta­tion for re­fined pe­tro­leum prod­ucts as its re­finer­ies have re­mained in a state of dis­re­pair for many years de­spite sev­eral re­ported re­pairs.

The re­finer­ies, which are lo­cated in Port Har­court, Kaduna and Warri, have a com­bined in­stalled ca­pac­ity of 445,000 bar­rels per day but have con­tin­ued to op­er­ate far be­low the in­stalled ca­pac­ity.

They lost N8.362bn in Jan­uary; N10.26bn in Fe­bru­ary; N16.04bn in March;

N11.44bn in April; N13.63bn in May, and N17.42bn in June.

The plants recorded a loss of N13.84bn in July; N13.21bn in Au­gust and N7.07bn in Septem­ber.

Kaduna re­fin­ery, which did not process any crude in eight months, lost N44.06bn, ac­cord­ing to the NNPC.

Warri lost N33.88bn as it did not process any crude oil in April, June, July, Au­gust and Septem­ber.

Port Har­court re­fin­ery posted a loss of N33.31bn as it was idle in Jan­uary, April, May and June, July, Au­gust and Septem­ber.

“Sim­i­lar to Au­gust 2019, no white prod­uct (petrol and kerosene) was pro­duced in Septem­ber 2019. The lack of pro­duc­tion is due to on­go­ing re­ha­bil­i­ta­tion works at the re­finer­ies,” the cor­po­ra­tion said.

The NNPC said it had been adopt­ing a mer­chant plant re­finer­ies busi­ness model since Jan­uary 2017.

It said the com­bined value of out­put by the three re­finer­ies (at im­port par­ity price) for Septem­ber amounted to N1.03bn.

The na­tional oil firm said, “No as­so­ci­ated crude plus freight cost for the three re­finer­ies since there was no pro­duc­tion while op­er­a­tional ex­penses amounted to N11.24bn.

“This re­sulted in cur­rent op­er­at­ing deficit of N10.20bn and an ad­justed deficit of N7.07bn by the re­finer­ies; af­ter ad­just­ing for prior over­stated deficits by PHRC.”

In the first term of the Pres­i­dent, Ma­jor Gen­eral Muham­madu Buhari (retd), the NNPC had planned to re­ha­bil­i­tate the re­finer­ies in order to at­tain a min­i­mum of 90 per cent ca­pac­ity util­i­sa­tion, us­ing third-party fi­nanciers and the orig­i­nal re­fin­ery builders to pro­vide the req­ui­site fund­ing and tech­ni­cal sup­port.

How­ever, af­ter over one and a half years, ne­go­ti­a­tions with fi­nanciers stalled in De­cem­ber 2018 due to vary­ing po­si­tions on key com­mer­cial terms.

The Min­is­ter of State for Pe­tro­leum Re­sources, Chief Timipre Sylva, said in oc­to­ber that the re­ha­bil­i­ta­tion of Port Har­court re­fin­ery was on­go­ing, adding that Warri and Kaduna re­finer­ies would be re­vamped in the first half of next year.

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