The Federal Executive Council (FEC), presided over by President Muhammadu Buhari yesterday, approved the sum of $1.5 billion, about N575 billion, for immediate commencement of rehabilitation work on the largest refining company in the country, the 32-year-old Port Harcourt Refinery.
The Minister of State for Petroleum Resources, Timipre Sylva, disclosed this to newsmen after the council meeting at the Presidential Villa, Abuja. Sylva said the contract for the rehabilitation was awarded to an Italian firm, Tecnimont SPA, to maintain and is expected to be executed in three phases.
While the first phase is expected to be completed within a period of 28 months, the Minister said the second and third phases will be completed in 24 and 44 months respectively.
He added that the funding has three components from Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions, and Afreximbank.
Sylva gave the assurance that the government would also facilitate the complete rehabilitation of the Warri and Kaduna refineries before the end of the lifespan of the current administration.
This is coming on the heels of the Federal Government’s proposal to sell or concession no fewer than 36 of its properties in the bid to raise funds to finance the 2021 budget. Top among these properties are the three refineries in Kaduna, Warri, and Port Harcourt, among others.
It would be recalled that Nigeria has spent about $25 billion in turnaround maintenance of refineries in the past 25 years, the prevailing development is coming after promises by the administration that the government would no longer spend on the facility. Previous rehabilitations notwithstanding, the Nigerian National Petroleum Corporation (NNPC) audit report had last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative losses in their 2014 to 2018 details.
Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses according to the report. The NNPC had said the three refineries processed no crude because of the rehabilitation works being carried out on them.