President says Port Harcourt, Warri and Kaduna refineries will undergo structural reforms to ensure long-term viability.
President Bola Tinubu has assured Nigerians that the government-owned Port Harcourt, Warri and Kaduna refineries will return to operation, stressing that restarting the facilities would only be meaningful if they become profitable and commercially sustainable.
President Tinubu spoke yesterday in Abuja during a meeting with the leadership of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), where he acknowledged concerns over the performance of the state-owned refineries.
He said the government was undertaking a “firm reset and structural reworking” of the refineries’ economics to ensure they deliver value to Nigerians.
“Ordinary flame and smoke of a refinery doesn’t mean that it is working until it is profitable and yields the value for which it was built,” the President said.
President Tinubu also said his administration had accepted responsibility for the assets and liabilities inherited from previous governments and would work to make the refineries productive.
The assurance comes amid renewed efforts to rehabilitate the facilities. In May, the Nigerian National Petroleum Company Limited (NNPCL) signed a Memorandum of Understanding with Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd. to facilitate the rehabilitation, restart and expansion of the Port Harcourt and Warri refineries through a technical equity partnership.
The government has spent billions of dollars on refinery rehabilitation over the years. About $2.9 billion was approved for the facilities under the former President Muhammadu Buhari administration, but sustained production remained elusive.
Meanwhile, the Federal Ministry of Finance has told the Senate Public Accounts Committee that it lacks some financial records required to respond to queries contained in the 2021–2023 Oil and Gas Industry Audit Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The ministry’s Permanent Secretary, Raymond Omachi, said the missing records were largely from agencies including NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), making it difficult to provide satisfactory explanations for some transactions.
Among the issues raised by NEITI is a $3 billion pre-export financing facility obtained in 2012 to settle petroleum subsidy payments, with questions over how the loan was recovered from federation revenue.
The audit also queried $722.6 million in dividends and interest paid by Nigeria LNG Limited to the former NNPC in 2021, alleging that the funds were neither remitted to the Federation Account nor properly accounted for.
NEITI further questioned about N200 billion spent on refinery rehabilitation despite none of the facilities being operational in 2021, as well as $221.283 million in overhead costs incurred by the National Petroleum Investment Management Services (NAPIMS).
Omachi said the ministry had engaged Arthur Andersen LLP to conduct a forensic audit and reconcile outstanding financial records. However, committee members questioned the repeated extensions granted for completion of the exercise.
The Senate committee, chaired by Senator Ibrahim Hassan Dankwambo, subsequently urged the ministry to ensure the outstanding issues were resolved and called for NNPCL and NUPRC to appear before it alongside the ministry.