The Return of the Warri Petrochemical Plant

Yemi Adeogoke

The federal government has every right to be in a buoyant mood; after several years of neglect, depressing commentaries, unbelief and cynicism fueled by failed promises, the nation’s four moribund refineries are on the cusp of astonishing transformation. This significant revival mirrors the power of unrelenting vision, unwavering commitment and undiluted driven by passion for a higher purpose. When the old Port Harcourt refinery resumed production on November 26, 2024, after extensive rehabilitation, the unfortunate attempt to weaponize and turn this landmark achievement into a political football stirred avoidable controversy that seemed to undermine its significance. Fortunately, while the doubting Thomases had their day, the impact of the revamp as a significant step in the country’s quest for energy security and concerted effort to reduce over reliance on imported refined products was not lost on well meaning Nigerians. Those who thought that the Port Harcourt refinery revamp was a flash in the pan were in for a rude shock.

Few days to the end of 2024, Mele Kyari, the intrepid head of the NNPC, the renaissance man at the centre of a silent revolution within the country’s energy sector delivered another powerful message to Nigerians. In company of regulators, journalists and government officials, he informed the nation that the Warri Refining & Petrochemicals Company (WRPC), situated in Ekpan, Uwvie and Ubeji areas of Warri has been revamped and was ready for business. The Warri Petrochemical plant, established in 1978, has an annual production capacity of 13,000 metric tons of Polypropylene and 18,000 metric tons of carbon black; it was built to cater to the markets in the Southern and South Western markets of the country. Composed of three stages, the Mele Kyari led NNPC, through its technical partners have started Stage One also called Area 1 which is able to produce AGO (diesel), Kerosene, Naphtha and others. These brands are required for both domestic and industrial use in the country. Shortly, the other plants that will produce Premium Motor Spirit (petrol) will commence production. The Kaduna refinery currently under rehabilitation will soon become operational.

Collectively, Kyari’s footprints in the upstream and downstream sectors of the energy sector, especially his determination to revamp the four state owned refineries with a combined capacity of 445,000 bpd underscores a huge leap in the country’s quest for energy security. Decades of neglect, damage and accusations of mismanagement had held the realization of this lofty aspiration in abeyance and inflicted pain on Nigerians. As the mainstay of the economy, there was little or no doubt that continuation on this unenviable trajectory would further imperil the economy and plunge it into further atrophy. Mele Kyari mounted the saddle as the 19th Group Managing Director of NNPC in July 2019 with the determination to cleanse the Augean stable. He came to office bristling with ideas on how to engineer what would become the most ambitious reform in the history of the corporation. There was simply no other way to confront the huge task he had set for himself; Nigerians were simply tired and frustrated about the endless revelations of sleaze and alleged mismanagement of the country’s cash cow and to have conducted the business of running the affairs of the corporation as usual would have assured for him, a prominent place in the hall of infamy.

Before Mele Kyari assumed office, almost on daily basis, Nigerians were treated to salacious commentaries detailing administrative lethargy and financial mismanagement of the corporation. The rot, administrative lethargy and alleged systemic corruption culminated in statutory infractions and the abdication of its responsibilities as the corporation began to fail in the fulfilment of its obligations on several fronts; it began to even falter in its remittances to the national treasury. The uncomplimentary stories which read like a parchment of corruption and scroll of iniquities tarnished the image of the corporation. An audited account of the corporation in 2011 discovered that it could not account for about N28. 5 billion on subsidy related claims; in 2014, Emir Lamido Sanusi the current Emir of Kano raised alarm that a staggering $20bn was missing in the account of NNPC. He spoke in his capacity as the Governor of the Central Bank of Nigeria. In March 2016, the Auditor-General of the Federation alleged that the corporation failed to remit about $16bn to the federation account. The avalanche of allegations must have weighed heavily on the mind of Kyari as he took over the mantle of leadership in the beleaguered oil behemoth.  

The reform minded immediately launched a raft of reforms centred around operational efficiency, transparency and openness in the running of the affairs of the corporation. His agenda entitled, “Roadmap to Global Excellence”, gave birth to TAPE, a new and revolutionary management doctrine anchored on Transparency, Accountability and Performance Excellence. The Transparency component of his agenda was aimed at maintaining, projecting and sustaining positive image, propagate and share values of integrity and transparency while the Accountability aspect would ensure compliance with business ethics, regulations, policies and accountability. Mele Kyari envisioned Performance Excellence to entrench a high level of efficiency anchored on efficient implementation of business processes which would emplace an appropriate reward system for exceptional performance among the workforce. Riding the crest of this bold reforms, the management began the publication of the Monthly Financial and Operations Reports (MFOR). This landmark publication not only elevated the transparency threshold governing the running of the corporation, it also provided critical insights into the corporation’s activities, performance and strategic direction under the guidance and the leadership of Kyari.

His leadership further strengthened the transparency governance structure of the corporation by enlisting it with Extractive Industries Transparency Initiative, EITI, Norway-based international organization that seeks to establish international standards for the good governance of oil, gas and mineral resources. As a result of the reforms he introduced, EITI scored NNPC high in enhanced transparency and accountability standards, increased competitiveness and concerted efforts in combating corruption within energy sector. For decades, the books of the corporation shrouded in secrecy, Kyari opened the books of NNPC to proper scrutiny and for the first in over forty years, he engineered the publication of the audited financial statements of the corporation its 19 subsidiaries registered under the Companies and Allied Matters Act (CAMA) 1990 as amended. This was carried out alongside that of the National Petroleum Investment and Management Services (NAPIMS) to shed light on Joint Venture finances.

Kyari’s relentless quest for transparency and his signature strategic investments in both the downstream and upstream sectors of the economy did not take time to yield the desired results. His shrewd moves, strategic investments and deliberate efforts to curtail waste and profligacy  led to the drastic reduction in the corporation’s loss profile from N803 billion in 2018 to N1.7 billion in 2019; in 2020, NNPC was able to declare a profit of N287 billion after tax deductions for the first time in its history. The new lease injected into the running the affairs of the corporation also boosted its capacity to fulfil its obligations; in April 2022, the NNPC paid $3. 68bn, out of a total $4. 689bn Cash Call debt to five Joint Venture Partners.

The ongoing revival of NNPC under the guidance of Mele Kyari is in sync with his leadership philosophy; right from his first day in office, he has never hidden his desire to bequeath a corporation that not only serves the purpose for which it was founded but one that aligns with international best practices. On the way to achieving this lofty goal, Mele Kyari has shattered many records; with the operational take-off of Warri and Port Harcourt refineries, the federal government has successfully unleashed a total refining capacity of 117,000bpd with ramifications. The decay of the refineries inflicted real and collateral damage on the country; Nigerians groaned under the scarcity of refined petroleum products, SMEs, the once thriving backbone of the country’s economy collapsed under the crushing weight of scarcity of the petroleum products. With the refineries on the way to full production capacity, the return of SMEs and Nigeria’s once flourishing middle class is about to become a reality. The realization of this possibility will define the legacy of the Tinubu administration.

• Adegoke, a public affairs analyst, contributed this instalment from Ikoyi, Lagos.