• Thursday, July 18, 2024
businessday logo

BusinessDay

Presidency raises alarm over NNPC’s non-completion of PH refinery

Nigeria announces tender for experts to operate Port Harcourt oil refinery

The presidency has expressed concern about the Nigerian National Petroleum Company (NNPC) Limited’s failure to meet key milestones crucial to President Bola Tinubu’s administration’s goals.

Sources from The Cable reveal that Hadiza Bala Usman, special adviser to President Tinubu on policy and coordination and head of the central results delivery coordination unit (CRDCU), voiced these concerns during a review of the quarterly performance assessment of the Ministry of Petroleum Resources.

Usman highlighted the government’s anxiety over several unfinished projects by the NNPC, particularly the ongoing delays in completing state-owned refineries, including the Port Harcourt refinery.

Read also: Port Harcourt refinery and Nigeria petroleum products’ sufficiency – Call on OPEC

Usman pointed out that despite the “mechanical completion” of a section of the refinery on December 21, 2023, and assurances that operations would begin after Christmas, the NNPC postponed the start of operations to April 2024. However, there has yet to be an update on whether production will commence this month, according to the source.

The constant rescheduling of the refinery’s production start date is causing concern among both the government and the public, Usman noted.

“This continued shifting in timelines is eroding the confidence of Nigerians in the government, and as an administration, we cannot allow that,” Usman reportedly stated.

“This is why Mr President mandated the CRCDU to track the deliverables and performances of all MDAs, and we have no option but to identify and engage the Ministry of Petroleum NNPC Ltd on the situation at hand.”

The source also mentioned that Usman stressed the rehabilitation of the refinery should aim for full production capacity rather than achieving minimal and symbolic production milestones.

Additionally, she expressed concern over the decline in crude oil production from 1.351 million barrels per day (mbpd) in the fourth quarter of 2023 to 1.265 mbpd in the first quarter of 2024.

Usman emphasised the need for the NNPC and security agencies to collaborate to enhance daily production and meet the government’s target of 1.65 mbpd for the latter half of 2024.

She also underscored the urgency of accelerating the completion of the Obiafu-Obrikom-Oben (OB3) gas pipeline project, which has been delayed.

According to the source, Usman stated that the CRDCU would leverage the support of all stakeholders to ensure the NNPC meets its performance targets as directed by the president.

In June, the NNPC, again, announced a new completion date for Nigeria’s $700 million OB3 gas pipeline, also known as the East-West pipeline.

Despite numerous pledges and deadlines, the pipeline, with a capacity of 2000 million cubic feet per day and being constructed by NNPC, has faced almost eight years of delays.

Another delayed project is the Ajaokuta-Kaduna-Kano (AKK) pipeline project. The construction of the AKK pipeline commenced in July 2020 and the project is aimed to ease transportation of natural gas from Ajaokuta in Kogi state to Kano through several states.

Oritsemiyiwa Eyesan, executive vice president, Upstream, NNPC in November 2023 had said that the project would be ready for commissioning in December 2023.

However, Mele Kyari, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd) on March 28 said that the completion date for the project is now December 2024.