N139.3 billion required to upgrade refineries – says Kachikwu

Ibe Kachikwu, Minister of State, Petroleum Resources and group managing director (GMD) of Nigerian National Petroleum Corporation (NNPC) said N139.3 billion is required to upgrade the capacities of the nation’s four refineries to get them to produce at least 20 million litres of PMS (petrol) daily.

This would only be about half of the domestic consumption of PMS, which stands at 45 million litres. Whereas, at present three of the refineries are producing about 12 million litres of PMS.

According to Kachikwu, neither the NNPC, nor the Federal Government can afford the amount to undertake the capacity upgrade of the four refineries to about 90% capacity utilization. As a result, he said the corporation is seeking for foreign investors who would be willing to invest money into the refineries.

He informed that they were high level discussions with some foreign investors, who would bring in funds to expand the refineries, though he did not give details.

Kachikwu, who spoke at the weekend while commissioning the crude line of the Port Harcourt Refining Company (PHRC), which was operating for the first time in seven years, said at the time being, PHRC and Warri Refinery were producing and pumping PMS (fuel) to the market; while Kaduna Refining and Petrochemical Company (KRPC) was presently receiving crude oil supply from the Escravos crude flow line, and would be refining in the next one week to 10 days.

Kachikwu however, debunked reports that the foreign investors were coming to take-over the refineries from the Nigerian workers; but that they would be operating only as ‘technical partners.’

The NNPC group managing director has put the combined average capacity utilisation of Nigeria’s four refineries at about 60 percent, producing about 12 million litres of PMS daily, as against national consumption of 45 million litres.

The refineries, PHRC 1 & 2, WRC, and KRPC have combined refining capacity of 445,000 barrels of crude per day. But for many years all four refineries have worked in fit-and-starts, thereby creating scarcity of petroleum products across the country. Poor management and maintenance has also contributed creating in stifling the country’s expected gains from oil production gain. For many years, the country has resorted to huge importation of refined products at high international market prices, but which was kept down locally through subsidy payout to a cartel of importers.

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