Refineries: Kachikwu Says over Protectionism Will Lead to Loss of Assets, Jobs

•  Urges oil workers to embrace investments

Chineme Okafor in Abuja

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, wednesday, warned that Nigeria’s continued protection of its petroleum refineries in Kaduna; Warri; and Port Harcourt, from reforms to improve their productivity would eventually lead to huge job losses and assets’ degradation.

Kachikwu explained at a conference of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja, where he represented Acting President, Yemi Osinbajo, that once the federal government succeeds with its push to have more private investors build and operate refineries in the country, the three refineries operated by the Nigerian National Petroleum Corporation (NNPC) could become obsolete and jobs lost.

He further noted that if nothing was done to revive the refineries, they could become obsolete in the next four years.
“The reality is that we want the private sector players to begin to build their own refineries. Whatever it is we are protecting would disappear. Unless we begin to move very rapidly and very quickly to position these refineries in such a way that they can compete, we would lose the refineries completely, together with all the job skills that exist in those areas,” said Kachikwu in his remarks at the conference.

He stated that Nigeria’s oil and gas industry was in need of critical infrastructure upgrade, and that the government alone cannot provide the needed infrastructure.

He stated that: “Infrastructure deficit is a key component. We lack infrastructures, any which way you look; whether it is upstream, downstream or gas. And the absence of infrastructure had made it impossible to have holistic private sector participation.

“Government is not the one to put in place this infrastructure. We have got to find policies and incentives that would encourage private sector participants to key into the infrastructure area.”

He also reaffirmed that the government has not concessioned the three NNPC’s refineries, and that efforts being put in that direction by it would be to get financiers to support their repairs to get the country to stop importing petroleum products.

According to him: “There have been no attempt and there is no approval to concession or to sell the refineries. What we have approved is to bring in a financing mechanism that would enable us finance, develop and upgrade the refineries as they are today. In their present epileptic performance levels, they would become obsolete over the next three, four years.”

“My drive is to see that those investment coming go through the transparent process. It would go through the NNPC Board and National Executive Council (NEC). Until that happens, nobody would have been said to be selected.

“Nothing in the equation of what we are trying to do is taking away the management of the refineries from the NNPC. Or taking NNPC away from the management. However, we need to bring in funds, we need to bring in best practices, we need to bring these institutions to work at the level where they are important for this country, otherwise we are losing money,” he added.

He further noted: “And the whole idea of continuing to import petroleum products in this country is a shame. And I imagine that all of us feel that shame.

“We need to fight anything that prevents us from stopping fuel import. Once that happens, it is going to open a new vista of opportunities.”

Speaking on the need to have workers in the sector invest their monies in the various businesses across the industry’s value chain, Kachikwu said: “Today, I urge you as members of the union, to take the sort of solidarity that you have and sing so passionately about away from just fighting the issues of staff welfare and move into the issue of staff investment. I like to see you begin to participate in the value chains.

“How do you become entrepreneurs?Some of you are some of the best brains there are in this sector. How do you make it possible to participate in a way that you can transit from been active players as employees in this sector to active players as entrepreneurs. Or active players as the ideas people. Because you know all the problems in the industry. Some of you have been here for 20, 30 years, like I have been. You know the areas where the opportunities lie; you know the areas where you can create new ideas.”

“I urge you today, as part of the process of this deliberation, to begin to transit from the model of protectionism around welfare and items you are entitled to, to protectionism in terms of opportunities that exist in this sector,” the minister stated.