FG To Sell Four State-owned Refineries Next Year

The federal government plans to
begin the privatisation of four of its
state-owned oil refineries before the
end of the first quarter of next year,
the Minister of Petroleum Resources,
Mrs. Diezani Alison-Madueke has
said.
“We would like to see major
infrastructure entities, such as
refineries, moving out of
government hands into the private
sector,” Alison-Madueke said in an
interview with Bloomberg TV Africa
in London.
Speaking further, she said:
“Government does not want to be in
the business of running major
infrastructure entities and we
haven’t done a very good job at it
over the years.”
A presidential audit of the facilities
led by a former Minister of Finance,
Kalu Idika Kalu, had last year
recommended the sale of the
refineries due to inadequate
government funding and “sub-
optimal performance.”
The refineries, which have a
combined capacity of 445,000 bpd,
should be privatised within 18
months, according to the report
submitted to President Goodluck
Jonathan in November 2012.
Nigeria, a member of the
Organisation of Petroleum Exporting
Countries (OPEC), produced 1.99
million barrels per day (bpd) of
crude in October.
The refineries are 124,00bpd Warri
Refinery, 60,000bpd Old Port
Harcourt refinery, 150,000bpd new
Port Harcourt refinery and
110,000bpd Kaduna refinery.
A previous attempt in 2007 by the
Olusegun Obasanjo administration
to sell the Kaduna and Warri
refineries was reversed by the next
government headed by the late
Umaru Musa Yar'Adua.
While Nigeria is also Africa’s top
crude exporter and the most
populous with more than 160
million people, it relies on fuel
imports to meet more than 70 per
cent of its needs.
Its state-owned plants operate at a
fraction of their capacity because of
poor maintenance and aging
equipment. The West African nation
exchanges 60,000 bpd of crude for
products with Trafigura Beheer BV
and a similar amount with Societe
Ivoirienne de Raffinage’s refinery in
Cote d' Ivoire, according to Nigerian
National Petroleum Corporation
(NNPC).
“We are right now undergoing a
major turnaround maintenance
programme of the refineries,”
Alison-Madueke said.
Improvements to the two-unit,
210,000-bpd Port Harcourt refinery,
the country’s biggest, would be
completed by the end of the year, to
be followed by enhancements at the
Warri and Kaduna sites in 2014,
according to the NNPC.
Warri has a processing capacity of
125,000 bpd and Kaduna, 110,000
bpd
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