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The Nigerian National Petroleum Company (NNPC) Limited has revealed that it is reviewing the possibility of selling its three state refineries to Port Harcourt, Warri and Kaduna, despite having invested about 18 billion dollars in their rehabilitation.
The CEO of the NNPC group, Bayo Ojulari, revealed it during an interview with Bloomberg on the sidelines of the 9th International OPEC seminar in Vienna, Austria.
Ojulari admitted that the enormous technological investments and inputs distributed over the years have not produced the expected results, describing the rehabilitation process as more complex than initially expected.
“We have made significant investments in these refineries for several years and introduced advanced technologies.
“Unfortunately, some of these technologies have not performed as expected. When it comes to very old refineries that have been inactive for prolonged periods, the challenges become more complicated,” he said.
According to him, the company is currently reviewing its entire refinery strategy and the result of this review can include the structures for sale.
“Now we are re -evaluating all our refinery strategies and we hope to conclude the review by the end of the year.
“That review could lead us to adopt a different approach. To be honest, the sale is not out of the table. All the options are taken into consideration,” said Ojulari.
On oil production costs, the boss NNPC has revealed that Nigeria currently spends between $ 25 and $ 30 per barrel due to the high operating costs, seriously guided by safety investments to protect rough gas pipelines.
“Our operating costs are quite high, outside of $ 20 per barrel, mainly due to the investments made to guarantee our pipes.
“At this moment, we have a 100 % availability on our pipeline network, but this has had a cost. We hope that over time and stability, these costs will decrease,” he added.
In the meantime, the president of the Dangote group, Aliko Dangote, has questioned the feasibility of the refineries owned by the government, suggesting that they may never work more correctly despite the billions spent.
Speaking on Thursday while hosting members of the CEO of Global Africa in his refinery of Dangote based in Lagos, Dangote recalled the failed privatization of 2007 of the refineries, which were returned to the government under the deceased president Musa Yar’adua.
“When we acquired the refineries in January 2007, they were doing about 22 percent of the production of premium motor spirit (PMS). But when the administration changed, we were asked to return them.
“The then CEO of NNPC convinced President Yar’adua that the refineries could be revived. Since then, about 18 billion dollars have been spent on the trend reversal maintenance, but they are not yet working,” he said.
Dangote has compared the effort to renew the structures that age the attempt to modernize a 40 -year vehicle.
“Even if you change the engine, the car’s body cannot manage the new technology. The same goes for these refineries. I doubt they will never work again,” he said.
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