Refineries’ Builders to Revalidate Studies for Plants’ Revamp

• NEITI to begin audit of third-party sales of Nigeria’s oil

Chineme Okafor in Abuja

Three Original Refineries Builders (ORBs) who built the existing 445,000 barrels a day (bd) combined capacity refineries of the Nigerian National Petroleum Corporation (NNPC) in Kaduna, Port Harcourt and Warri, have agreed to revalidate the scoping studies the NNPC has developed for its planned revamp of the refineries, the Group Managing Director of the corporation, Dr. Maikanti Baru, has disclosed.

He also said the ORBs would bring in new technologies into the process units of the refineries to enable them operate optimally like modern refineries.

The revalidation, Baru noted, would include the cost for the revamp.

Coming ahead of the October 2018 date the NNPC expects to sign funding and contractual agreements with third-party financiers and contractors for the revamp of the refineries, Baru explained in an interview that the corporation now has the confidence of the Japan Gas Company (JGC) which built the Port Harcourt refinery; Saipem which built Warri; and Chiyoda which built Kaduna to partner it on the revamp programme.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had disclosed in a June 2018 podcast that the NNPC would sign agreements for the refineries’ revamp in October, but Baru in an interview THISDAY obtained yesterday in Abuja from the latest edition of the corporation’s in-house magazine – NNPC Magazine – said the NNPC has been able to overcome the initial reluctance of the ORBs to work with it in the programme.

“Our refineries have suffered a lot of neglect and bureaucratic issues. And most of them had their last turnaround maintenance (TAM) which is supposed to be done every two years, in the late 1990s.

“We came up with the procedure to say that we would first of all do a detailed scoping of what needs to be done in each of the refineries, and we got a firm to participate with our own company, NETCO, to carry out a thorough assessment of our refineries and come out with what needs to be done to the last spot and subsequently cost these activities,” said Baru.

He further explained: “We then approached the original refineries builders. We engaged them, though there was an initial reluctance, but after discussion with them, they knew we are serious about it this time around. They are ready to revalidate the scoping that we have done as well as bring in modern technology into some of the process units that are already installed to bring them to operate like modern refineries.”

The corporation’s helmsman indicated its board had in April at a London meeting with shortlisted firms for the programme, assured them of a sustainable plan to repay their investment in the programme. He added that NNPC was looking forward to shutting down the refineries soon for repairs once it signed the agreements and financiers provide funds for ORBs to start work.

Meanwhile, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed plans to expand its audit operations in the oil and gas industry to cover trading of the country’s oil by third parties.

A statement from the agency indicated it held a workshop for relevant government agencies and oil trading companies, at which it explained the decision to move into commodity trading is in line with its mandate and compliance with the EITI 2016 global standards.

The statement was signed by its Director, Communications and Advocacy, Dr. Orji Ogbonnaya Orji, who incidentally told participants at the workshop that, “the overall objective of NEITI’s interest in commodity trading is to improve transparency in the sale of the state share of production by government and state owned enterprises among others.”

Orji, thus called on the companies and government agencies involved in commodity trading to carefully study the templates the NEITI has developed in this regards with a view to internalising the new reporting requirements as part of their respective overall business model.

The statement claimed representatives of government agencies, oil and gas companies at the workshop supported NEITI’s decision to begin audit of commodity trading. They reportedly welcomed the development as a way to improve transparency and fair competition in the business of commodity trading.

They also advised NEITI to focus its planned audit on getting accurate data on oil production; measurement of volumes of government equity crude oil including crude condensate; crude allocation for export and domestic use; accurate computation of in-kind revenues; as well as taxes and royalty.

They equally identified marketing contracts and related agreements; process of transfer of income from sales of equity crude; liftings and other similar transactions as other key areas in commodity trading the NEITI could give adequate attention. The NEITI equally stated in the statement that the National Assembly has agreed to set up a parliamentary group on EITI, drawn from relevant committees in the Senate and House of Representatives, to coordinate legislative actions on implementation of remedial issues identified by its independent audit reports.