The Federal Government, Thursday, said that it’s not ready to sell or concession any of its four refineries in whole or in part, as the refineries are yet to return to optimal level, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu has said. He said the refineries are currently operating below their capacity level, despite several years of turnaround maintenance check carried out on them, by the government.

Speaking at the 2017 edition of the National Association of Energy Correspondents (NAEC) Conference in Lagos, Kachikwu said the government looks for external funds to rehabiliate the exisitng refineires, adding that the government met and discussed with one of the investors to invest $1billion in the rehabilation of the refineries, without having any shares in it. The theme is: ” PICB: Prospects and Challenges to Nigerian Oil and Gas Industry.”

Represented by the Deputy Director, Department of Petroleum Resources(DPR), Kachikwu said the intention of the Federal Government to carry out the turnaround maintenance check on Warri, Port Harcourt 1 &2  and Kaduna refineries years ago, was not sell them, but to prepare them for improved processing of crude oil into petroleum products.

He said: ” We sought externally for resources to finance the rehabiltation of the  existing refineries, which was a very tall order, telling someone to invest $1billion in the refineries rehabilitation, with no equity, and wait for incremental volumes of refined products to recoup their investment.

According to him, the actual rehabilitation work would be carried out by the original refinery builders (ORBs), with financers funding the repair work, and a joint management team comprising ORBs, Financiers and NNPC, to steer the operation of the refineries over a period of 5-6 years to bleed incremental liquids for recouping investments.

Kachikwu said the government has not done the valuation of the refineries, talk less of thinking of selling them to the investors, adding that the government needs to be sure of the worth of the refineries, before placing a price on them.

On modular refineries, he said only two out of between agency 40 and 50 companies, which got the licences to operate the refineries have shown considerable interest in the project, adding that majority of them are yet realise the task involved in setting up refineries in the country. He said DPR is yet to ascertain what holders existing licences has done since they were issued licences, adding that the high percentage of  non-performance of the refineries made DOR to engage the owners or the licensees to ascertain their problems.

On collocation, he said the government has moved from its initial model of collocating the refineries with the existing refineries to the co-location of brand new greenfield refineries. He said for Nigeria to become net exporter of petroleum products, the government needs to encourage companies to participate in the process of refining crude oil.

He added that when Dangote Petrochemical Refineries is completed in 2019 with its over 600,000 capacity, coupled with modular refineries in operation, Nigeria would be self-sufficiency in the area of crude processing

Also, the Chairman, Integrated Oil Limited, Captain Emmanuel Ihenacho (rtd), said funding is the major problem hindering the operation of modular refineries in the country.

He said operating a refinery costs N$2billion, adding that local banks are not interested in providing the loan to present and prospective investors in refineries.

The Nation