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Reps Probe Funds Spent On Maintenance Of Refineries

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House of Representatives has resolved to pursue a comprehensive audit of funds so far expended on the maintenance and rehabilitation of the nation’s refineries.

The House also urged the federal government to grant license and provide incentives for the building and construction of modular refineries.

The facilities to be probed included Port Harcourt, Warri, Kaduna refineries.

Motion for the probe was moved by Hon. Onofiok Luke from Akwa Ibom State at Wednesday plenary.

It was considered and adopted by the House.

The probe is coming on the heels of the approval of $1.5 billion by the Federal Executive Council, FEC for the rehabilitation of the Port Harcourt refinery.

Incidentally, the singular approval has attracted widespread criticisms from many quarters which argued the money was far bigger than the worth or value of the facility itself.

Moving the motion titled “Need to Ensure Transparency and Accountability in the Rehabilitation Exercise of the Nation’s Refineries”, Luke noted the recent news of the approval of the Sum of $1.5 billion, about N575 billion, for immediate commencement of rehabilitation work on the 32-year-old Port Harcourt Refinery phased at an estimated completion period of 44 Months (approximately – 4 Years) with three components funding from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions, and Afreximbank.

“The Port Harcourt Refineries Located in Alesa Eleme southeast of Port Harcourt, operates two oil refineries, including an old plant commissioned in 1965 that can process 60,000 barrels (9,500 m3) per stream day, as well as the new plant commissioned in 1989, which has a capacity of 150,000 barrels (24,000 m3) per stream day.

“NNPC had allegedly spent about $25 billion in turnaround maintenance of refineries in the past 25 years, this latest prevailing development is coming after promises by the current administration that government would no longer spend on the facility.

“Previous rehabilitation notwithstanding, the Nigerian National Petroleum Corporation (NNPC) audit report had last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details.

“Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses. The three refineries processed no crude because of the rehabilitation works being carried out on them, therefore, there was no associated crude plus freight cost for the three refineries since there was no production but operational expenses that amounted to ₦10.27 billion. This resulted in an operating deficit of ₦10.23 billion by the refineries.

“In July 2017 major structural construction began on Dangote 650,000 bpd Refineries with partial refining capability likely in 2022. The same lag period that Rehabilitation would be carried out on the 210,000 bpd Port Harcourt Refineries.

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“The House is deeply worried by the public uproar on this latest initiatives, the voice of the National Assembly must be recorded to ensure judicious use of the proposed $1,5 billion considering facts that the facility has failed to perform after years of rehabilitation/repair/maintenance”, Luke said.

Adopting the motion, the House mandated its Committee on Petroleum Resources (Downstream) to carry out the investigative hearing.

It also mandated the Committee to examine the performance bond, assurance, warrantees and guarantees put in place for operating and maintaining of the plants after commissioning.

The commitment has 6 weeks to complete its assignment and report back to the House for further legislative action.

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