Nigeria's leading finance and market intelligence news report.

NNPC to adopt NLNG model in refinery rehabilitation, sets 3 years target

***PIB will legally put a stop to PEF with full deregulation

Mele Kyari, the Group General Manager of the Nigerian National Petroleum Corporation, NNPC late Wednesday said the federal government has advanced conversation in adoption the NLNG model in the rehabilitation of the three major refineries in the country,emphasising a three year completion date.

Kyari who spoke on ‘Politics today’ a Channels Television programme monitored by our correspondent in Abuja said the government is embarking on build,operate and transfer stategy in getting the refineries back to work.

“I can confirm to you that there is a conversation going on where we install the NLNG model,whereby the government -NNPC becomes a minority shareholder in this asset and of course there would be more scrutiny of shareholders and also becoming more efficient to operate.

“The first thing we are doing especially for Warri and Kaduna refinery is to have a system where people would put their money,work on it.They would operate this refinery with us, we would have contract jointly with them to sale through the processes and ultimately migrate to a situation where equity would be determined by the Nigerian people.”

The GMD who admitted the losses persistently posted by the refineries in the monthly report of the corporation said the federal government is resorting to private capital for the refinery rehabilitation,revealing that the government has no money to fund the refineries.

“We are not building a new refinery,we are rehabilitating these refineries. Government does not have the resources to give 100 percent fund to NNPC for the refineries.

Kyari said,”What we’re doing today is to deliver on refinery rehabilitation through the best of means.Ultimately, when they come back to life, they would be able to deliver beyond the 90 installed capacity that every refinery should run.”

Kyari explained that the government is also embarking on new initiatives as the rehabilitation is ongoing informing that one of them splitter plans on having condensate refineries to encourage other private partners to make sure that they establish refineries.

The GMD stated that the government is determined to fix the refineries within three years time,the country will be the net exporter of fuel.

On the source of funding for the refinery rehabilitation ,he said,”We ‘re resorting to private capital which means that those that are providing the capital must have some level of control over your processes.”

According to him,”We are going to ensure operate and maintenance strategy,which would free NNPC from the direct responsibility of running this refinery,we would support the processes and ultimately have a more efficient system of operations.”

On what becomes the fate of Petroleum Equalisation Fund,since the industry has been deregulated,he said,”There is a requirement of the legislation to take out the PEF,and you won’t do this until the PIB come into play.

According to the GMD,”We’re still in a transition and I understand what you mean.Today,Petroleum is completely brought into the country from external sources.Even if it is not,until all the refineries work,and pipeline network comes into operations,you’re not able to deliver products to nearer to the customers.”

“It means you must use truck to deliver product to different destinations in the country.The only thing that is left today is the bridging cost that we are operationally referring to. This bridging cost would be taken out as soon as the full deregulation of the sector is done.

While giving updates on oil discovery kn the Northern part of country,”As a matter of fact we have found significant oil in the Benue trough and there are potentials of finding oil in the Chad basin and in Anambra platform and that would add to our reserves and ultimately products will be within the reach of consumers.At the right time we would make the right announcements on the basis of the law.”

I can confirm to you that we have found significant oil in the Benue trough,he said.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.