Senate Seeks to Halt Planned Concession of P’Harcourt Refinery

Damilola Oyedele in Abuja

The Senate on Tuesday directed the Ministry of Petroleum Resources, and the Minister, Dr. Ibe Kachikwu, to immediately stop all processes relating to the planned concession of the Port Harcourt Refinery to Agip and OANDO Plc.

This is as the legislative chamber set up an ad hoc committee to carry out a holistic investigation to determine how and why such a deal was sealed and the criteria used to select Agip/ENI and OANDO Plc to maintain and operate the Port Harcourt Refinery, and at what cost and time frame.

The Senate ordered that the processes for the concession be halted pending the outcome of the investigation of the committee chaired by Senator Abubakar Kyari (Borno North).

The resolution followed a motion sponsored by Senator Sabo Mohammed (Jigawa South) who noted that the government recently entered an agreement with Nigerian Agip Oil Company (NAOC), a subsidiary of ENI, an Italian oil giant to construct a $15 billion refinery in the Niger Delta area.
The deal also includes investment by Agip in a power plant with the Italian company assisting Nigeria in the repairs of the Port Harcourt Refinery, the senator added.

“Notes that the Minister of State for Petroleum Resources stated that the agreement was part of a broader federal government plan to increase capacity for local production and consumption of petroleum products with the aim of ending fuel importation in Nigeria by 2019;”
“Also notes that while the resolve by the federal government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter,” he added.

Mohammed expressed concern at the lack of clarity of the agreement, as to whether it is a concession or an agreement to build a new refinery.
“The confusion became obvious following the disclosure on May 11, 2017, by the Chief Executive Officer of OANDO Plc on the floor of the Nigeria Stock Exchange that the group had received approval of the federal government to repair, operate and maintain the Port Harcourt Refinery Company with their partner Agip,” he added.

Mohammed stated that while the development would have been wonderful because it would mean an end to importation of refined products by the year 2020, there are many questions begging for answers.

“Is it Agip/ENI or OANDO Plc that is taking over Port Harcourt Refinery? Was there the observance of the privatisation law as regards due diligence, selection from preferred bidders before ceding of the Port Harcourt Refinery to Agip/OANDO?”
“Also concerned that the planned concession of Port Harcourt Refinery to Agip/ENI in partnership with OANDO Plc without recourse to due process is illegal and a clear attempt at ridiculing Nigerians and would definitely create a big hole that would be hard to fill in the anti-corruption crusade of the present administration,” he said.

Mohammed added that in such transactions, the best practice is to select partners through open and competitive bids, i.e. prepare the business for sale, market the business, buyers selection and close the transaction.

The transaction is also unknown to the Bureau for Public Enterprises, the senator added.
Other members of the seven man committee include Senator Matthew Uroghide (Edo South), Senator Dino Melaye (Kogi West) Senator Aliyu Wamakko (Sokoto North), Senator Duro Faseyi (Ekiti North) and Senator Benjamin Uwajumogu (Imo North).