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Reps to probe over $20bn allegedly spent on turn around maintenance of refineries

Reps to probe over $20bn allegedly spent on turn around maintenance of refineries

The House of Reps, on Tuesday, resolved to set up an Ad-hoc Committee to investigate over $20 billion allegedly spent on Turn Around Maintenance (TAM) for the country’s petroleum refineries over the past few years.

The ad-hoc committee, the composition of which will be announced soon, is also expected to ascertain the viability of continued investment of public funds into the four refineries and allocation of 445,000bpd crude utilisation for the same purpose.

The resolution was passed sequel to the adoption of a motion aimed at investigating the status of the four refineries, the TAM and regular/modular refineries, sponsored by Ibrahim Isiaka (APC-Ondo).

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In his lead debate, Isiaka, who observed that Nigeria is the 12th largest oil-producing nation in the world, with an estimated 37.2 billion barrels of crude oil deposit, and ranked seventh in the world, in terms of gas reserves of about 187 trillion feet, was not among the three top countries in Africa in terms of refining capacity.

He alleged that “whopping sums of $308 million, $57 million, $200 million and lately, more than N264 billion had been spent on maintenance of the refineries. Yet it was reported that the Nigerian National Petroleum Corporation (NNPC) is seeking for $1.8 billion to carry out another TAM to make the refineries attractive to investors.”

According to him, the average capacity utilisation of all the Nigerian refineries stood at 11 percent, which is the worst performance record in Africa, compared to 81 percent and 85 percent respectively for Egypt and South Africa; Senegal which runs one refinery with a 27,000bpd capacity; Cameroon has one with 42,600bpd; Congo – 21,000bpd; Niger Republic – 20,000bpd; Chad – 20,000bpd, Zambia – 34,000bpd, Gabon – 25,000bpd, Algeria – 499,000bpd, Libya – 380,000bpd, South Africa – 626,500bpd and Egypt – 1,102,550bpd respectively.

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Isiaka, who noted that Nigeria is the only member of the Organisation of Petroleum Exporting Countries (OPEC) that depends on imported refined petroleum products, expressed concern that in spite of a major paradigm shift and consideration of different reliefs, including reduction of licencing fee for new refineries from $1 million to $50,000 to make domestic refining attractive, only Aliko Dangote had put the license to use.

He added that no effort had been made to revoke the licenses given to individuals and corporate organisations to build refineries which had not yet be utilised. The lawmaker, who observed that the primacy of fuel in Nigeria’s hierarchy of needs/economy, as well as public energy supply, is grossly inadequate, posited that 80% of economic and domestic processes depend on power from generators.

While ruling, Yussuff Lasun, Deputy Speaker, who presided over the plenary session, explained that the ad-hoc committee would determine the current utilisation level of Warri, Kaduna and Port Harcourt refineries. The committee will also identify the private and corporate individuals that have refused to utilise the licenses (Regular and Modular), the readiness and status of all current holders and report within 90 days for further legislative action.