Nigerian Refineries: Kyari and a promise kept

Mele kyari 

By Our Report 

When on 7th July President Muhammadu Buhari appointed Malam Mele Kyari as the Group Managing Director of the NNPC, the oil and gas sector was going through tough odds. The nation's refineries were all on their knees. There were few stakeholders who nursed the hope of seeing the dormant refineries being brought back to life again. Many thought it would take decades for the refineries to bounce back to normal.

While taking over the reigns of the NNPC leadership, Mele Kyari - the new GMD made an open pledge to bring the refineries back to life. He did not only stop at that pledge, he also announced a time frame, namely in 2021. He also promised to kick-off the revival process with Portharcourt refinery rehabilitation. He also promised to take on Warri and Kaduna refineries afterwards. 

Today, Nigerians are living witnesses to the signing of the $1.5billion contract for rehabilitation of the Portharcourt Refinery. As he promised on July 7th 2019, plans have reached advanced stage to also award the rehabilitation  of the Warri and Kaduna refineries  in June this year.

Reports indicated that the drive by the new management of the Nigerian National Petroleum Corporation (NNPC) to boost in-country refining capacity was bolstered  with the signing of the Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) contract for the rehabilitation of the 210,000 barrels per day capacity PortHarcourt Refinery in Alesa-Eleme, Rivers State. 

Reports further revealed that the rehabilitation project which has a completion timeline of  between 18 and 44 months under a three-phase arrangement was awarded to Milan based Tecnimont SpA at a lump sum contract price of US$1.5 billion, inclusive of VAT and other statutory payments. 

An obviously excited Group Managing Director of the NNPC, Mallam Mele Kyari,  reportedly described the PHRC rehabilitation project as "a dream come true," noting that the it was in tune with President Muhammadu Buhari’s promise to the Nigerian people to make the refineries work. 

He also stressed that in arriving at the choice of Tecnimont SpA, the Corporation embarked on a transparent tender process which can withstand any forensic audit, noting that NNPC was ready and open to answer any question pertaining to the project. This declaration was also in tune with his philosophy of transparency and accountability.

The bottom line in the ongoing rehabilitation of the nation's refineries by the Kyari-led NNPC management is that a promise earlier made has eventually been fulfilled. Beyond the spirit of transparency and accountability the new NNPC has proved beyond reasonable doubt that it is possible to achieve something spectacular in the management of public resources and assets once the drivers are people whose word is their bond.

POTENTIALS OF THE PROJECT

For many years, vociferous misgivings have been shown by Nigerians across the nation, about the comatose state of Nigerians refineries. The media has featured interviews with prominent Nigerians lamenting and sometimes condemning government over the state of Portharcourt refinery, Kaduna Refinery especially.

National commentators, politicians and economic analysts have shouted themselves hoarse over the need to revive Nigerian refineries in order to save the nation's millions of dollars in the importation of refined crude. These complains have only subsides when  GMD Mele Kyari made na open declaration that is now making industry watchers to have confidence that the nation's resources won't sink again importation of refined crude.

WHAT HAPPENS TO TYE NATIONAL ECONOMY

Experts would readily admit that once the Kaduna and Portharcourt  bounce back, there will be millions of jobs all over the country - staff would be recruited in tens of thousands, millions of contractors would get plenty of contract awards.This is not counting private oil transporters across Nigeria.

The national economy will definitely get a big boost in terms of IGR and Direct Foreign Investment (DFI) because a successful operation of the refineries has the potentials of boosting investor confidence.

With a major boost in our export of refined crude comes a corresponding increase in our foreign reserves - which will definitely be helpful to the national consequently.

It will not be easy to even say, with pinpoint accuracy, how much in monetary terms a revival of Portharcourt or Kaduna Refinery will generate - whether in naira, pound sterling or dollars.

TIMELY INTERVENTION

It is unmistakable that the dream-come-true that is the revival of Nigerian Refineries is quite timely. Coming at time of tough odds for the national economy, nothing can be better than an intervention in a big way.

With the national economy ravaged by the  Covid-19 era, it should not be difficult to see that the revival of Nigerian refineries is something for which the time is so ripe.

The snag brought about the rampaging covid-19 infection has already worsened matter for many African economies. This calls for thinking out the box - through leadership innovation. That is the Kyari example. The revival of these refineries will now take care of Nigeria's immediate economic needs under covid-19 - though the rate of infection has come down significantly - as experts have gleefully explained.

On the whole, investigations by this magazine have confirmed the decision to modify the operations of oil and gas sector and that the ongoing revival of the refineries is a part of the larger picture