By the first quarter of 2016, Nigeria should have stopped importation of refined crude oil from abroad, this is according to Dr. Tim Okon, the Coordinator, Corporate Planning and Strategy of the Nigerian National Petroleum Corporation, NNPC.
Okon made the assurance on Thursday, March 5, 2015, while updating members of the Senate Committee on Petroleum (Downstream) on activities of Nigeria’s refineries.
He assured that the nation’s four refineries would be fully back on stream in the first quarter of 2016.
The NNPC’s chief also explained why the refineries have not been working optimally, saying that NNPC could not afford to pay the outrageous charges of its builders.
Okon explained that when the corporation invited the builders from Japan and Italy for turnaround maintenance and they refused to come, NNPC recommended SAIPEM, a foreign firm operating in Nigeria to carry out the maintenance on behalf of the original builders.
He said when SAIPEM came it offered to maintain Port Harcourt Refineries at $550 million, Kaduna Refineries at $600 million and Warri Refinery at $180 million.
Okon said the bills were unacceptable to them because they were too high despite that the figures were eventually reviewed downwards.
This, he said, prompted NNPC to send some of their engineers to the builders abroad to learn the repair processes with a view to saving costs.
Okon said consequently, NNPC began to spend as low as N10 million to maintain the refineries every month from October 2014.
He said the capacity of the refineries was 445,000 barrels of crude oil per day, but they currently could process only 60,000 barrels per day as a result of maintenance problem and movement of crude through the pipelines.
Okon also said losses recorded from the use of the refineries had been attributed to lack of recovery mechanism for what had been done, adding that after processing only 60,000 barrels of crude per day, the remaining barrels are sold in the international market.
He also said the NNPC paid international price for its crude everyday but the retail was low, observing that the situation would have been better if the National Assembly had passed the Petroleum Industry Bill, PIB.
The NNPC’s Group Managing Director, Joseph Dawha, also assured that the refineries would work at full capacity next year due to the new strategy adopted by the corporation.
The Port Harcourt and Kaduna refineries were built by two Japanese firms – Chioda and JGC, the Warri Refinery was built by Snapcogetti of Italy.
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