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FG loses N231bn from inactive refineries since 2015

President Muhammadu Buhari

Chibisi Ohakah,

The major government-owned located in Warri, Port Harcourt and Kaduna lost over N231 billion in the last four years due to the Federal Government’s inability to keep its promises of rehabilitating them, latest report from the Nigerian National Petroleum Corporation (NNPC) has said.

According to the report released last weekend in , the delayed rehabilitation of the cost the FG N34.57 billion from June to December 2015; N8.64 billion in 2016; N47.19 billion in 2017, and N132.51 billion in 2018. All the stopped the processing of crude oil in 2015. The report said that in 2015, , Warri and Kaduna lost N10.05 billion, N36.03 billion and N21.39 billion respectively.

Further in the report, the Warri refinery was recorded as idle for five months in 2016; did not refine crude for six months, while refinery was recorded as being idle only in September of the same year. In 2017, Kaduna, Warri and Port Harcourt refineries were said to be idle for six, five and two months, respectively, causing the FG to lose N32.61 billion, N22.14 billion and N11.51 billion respectively.

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Then in 2018, could not process crude oil for 11 months, while Port Harcourt and Warri were shut for seven and months respectively, losing N31 billion, N59.96 billion and N41.71 billion. The NNPC report also said that the Kaduna and Port Harcourt refineries could not process crude oil in January this year. All the refineries have a combined installed capacity of 445,000 barrels per day, the Corporation said.

The immediate past minister of state, petroleum resources, Dr Ibe Kachikwu, has said upon assumption of office in 2015 that the FG has intended to attain a minimum of 90% capacity utilisation in refineries, using third-party financiers. Investigations show that the ministry of petroleum resources had reviewed expressions of interest from 28 potential financiers. But varying positions of interest and “key commercial terms” were said to have stalled the negotiations last December.

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An impeccable NNPC source said however that indeed the negotiations for offshore funding were scuttled said it had due to what he described as ‘onerous conditions and positions’ sought by the third party financiers who were approached. The Corporation was said to have resorted to internal cash flows and debt financing from the financial markets, which turned out not to be enough.

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