A former Group Executive Director of the Nigerian National Petroleum Company Ltd. (NNPC), Alex Ogedengbe, has cautioned Nigerians to temper their expectations regarding the much-anticipated revival of the Port Harcourt refinery.
He revealed this in a recent interview on Channels Television.
Ogedengbe, who previously served as the managing director of both the Kaduna and Port Harcourt refineries, expressed skepticism about the refinery’s functionality within the current month.
Despite assurances from the NNPC and the Ministry of Petroleum that a 60,000 barrels per day (bpd) portion of the 210,000 bpd refinery would be operational in December, Ogedengbe contested these claims.
He emphasized that even if the refinery did become operational, it would likely produce no more than 25 percent of petrol per barrel of crude oil.
In a critical analysis, Ogedengbe questioned the decision to prioritize the rehabilitation of the 58-year-old Port Harcourt refinery over a newer, 150,000-bpd facility built 30 years later.
He argued that the older facility, which had not operated since 1990, utilized outdated technology and lacked the efficiency of its modern counterpart.
“If what I heard from that short, nine-minute release by the MD of the refinery is anything to go by, at best they will have some kind of mechanical completion by the end of December, because he said they are 75 percent done overall, but 98 percent done on procurement.
“But by end of December, at best, they will have mechanical completion, and then they will do the testing of each equipment and system.
“You test one equipment, you see how it fits with another one. Then you put everything together as a system. The system tests may take anything from two weeks to one month before you can start, in my opinion, based on what he said.
“I don’t think it can be done more than within two or three months. Now, what you will get there again, is something like the old refinery of 60 years ago with just new equipment. The capacity is still 60,000 barrels per day.
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“The old refinery that is being repaired now, cannot produce more than 25 per cent maximum of crude oil. In other words, one barrel of crude will produce a maximum of 25 per cent of petrol. Whereas, the newer Port Harcourt refinery which is next door to the old one they are repairing can produce up to 48 per cent or 50 per cent on crude oil.
“So, overall, I don’t expect any appreciable contribution. That is even if all the systems work. I don’t have confidence in that right now from what I’ve seen,” he stated.
“The old refinery, the one that was built in 1965, that’s about 58 years ago, has not operated since 1990 when the new refinery came on. So, it’s been shut down,” he disclosed.
Ogedengbe recalled that he was the project manager when the new refinery in Port Harcourt was built between 1985 to 1990, stressing that the new one is a more complex and modern facility and should have been fixed first.
“If you put one barrel of crude oil into the new one, 48 to 50 per cent of it will be petrol. The old refinery, if you put one barrel of crude oil into it, you only get maximum 23 to 24 per cent of petrol, which shows the complexity.
“The old refinery has just one conversion unit that can produce petrol. The new refinery has four different conversion units. That is the issue. Why is this old refinery being rehabilitated instead of the new one?
“The old refinery was built in 1965 with a different old technology. Now what is being done there? “ he asked, stressing that rather than rehabilitation as Nigerians have been told, it was actually being reconstructed.
Ogedengbe, who served as the project manager during the construction of the newer Port Harcourt refinery between 1985 and 1990, highlighted the complexity and advanced technology of the new facility. He raised concerns about the ongoing rehabilitation, suggesting that it was more of a reconstruction effort than a straightforward refurbishment.
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According to Ogedengbe, the testing phase alone could take at least three months, casting doubt on the likelihood of the refinery becoming operational in December. He also delved into the historical challenges faced by NNPC refineries, emphasizing the decline due to insufficient maintenance funds and the absence of a profitable business model.
“There is no way we can justify the situation we have today. The refineries were built according to international standards. They were all tested for completion and they performed at the time they were completed.
“They ran according to the design for many years. However, being a government-owned facility, not a private one, they were not run commercially.
“What does that mean? Monies did not come in time for maintenance. Not enough money actually was given for maintenance and it was not a profitable project. So it was just declining slowly because of lack of maintenance until it crashed. All of them crashed by 2018,” he stressed.
He stated that although during his time money was usually budgeted for maintenance, but such monies were never fully released by the NNPC headquarters.
To augment this, he said the Kaduna and Port Harcourt refineries at the time he was the managing director, went out of its way to begin the production of tins and drums to survive.
“Every month, we will receive between 50 and 60 per cent of our budget. We are supposed to pick up the rest somehow. You have to be imaginative.
“ When I was in Kaduna refinery for instance, it was the only refinery that had a tin and drum manufacturing plant, which is not typically a refinery thing, but we had that plan because we were producing kerosene and we were selling in tins.
“So I was selling ordinary tins and drums to people who were buying them for water and other uses to augment the budget for the refinery operations,” he said.
During his tenure as managing director, Ogedengbe revealed that allocated funds for maintenance were often not fully released by the NNPC headquarters. To cope with budget shortfalls, the Kaduna and Port Harcourt refineries, under his leadership, explored alternative revenue streams, such as manufacturing tins and drums.
Ogedengbe urged a reevaluation of the decision-making process behind prioritizing the older refinery and called for transparency regarding the rehabilitation process. As doubts linger over the refinery’s December deadline, stakeholders await further updates from the NNPC and the Ministry of Petroleum.
“In 1990, we generated products at about an average of 95 per cent throughput in refineries in Port Harcourt combined, old or new”, he stated, adding that at the time there was no fuel scarcity, but that Nigeria even had some for export.
“They awarded a contract of $1.5 billion three years ago or two and a half years ago. So, the first person when you are in doubt, is to ask the contractor to speak. Let us see the report of the contractors. We haven’t seen that,” he lamented.