About 47 oil firms have begun the race to secure the contracts for the upgrade of the 445,000 barrels per day capacity ailing refineries and co-location of the downstream installations in Nigeria, New Telegraph has learnt.
While Vitol and Seplat submitted bids for co-loca-tion at Warri Refining and Petrochemical Company, other local companies locked horns to secure major upgrade contracts for other installations in Port Harcourt and Kaduna.
The Nigerian National Petroleum Corporation (NNPC), it would be recalled, launched bidding to find partners to overhaul the 445,000 barrels per day capacity ailing refineries in Nigeria. The bidding will end on May 30, the tender showed, adding that investors “would be paid from proceeds from the sale of refined products.”
Vice President, Petroleum Technology Association of Nigeria (PETAN), Mr. Jeff Onuoha, confirmed exclusively to New Telegraph that indigenous firms, who are members of PETAN, had submitted various bids and willingness to participate in the tender process.
“We are participating in the tender process for refineries’ upgrade. Indigenous firms in Nigeria have the capacity to compete, secure and deliver on such contracts,” he said in an interview on the sidelines of a confab in Houston, Texas, United States of America. Managing Director of Seplat, Mr. Austin Avuru, also confirmed that his company submitted bids for the Warri Refinery’s co-location.
“Yes, we submitted bids for the contracts, which we believe that when secured, it will complement our upstream operations. We did the tender submission in partnership with Vitol, which has expertise in the downstream/refining business,” he said.
Avuru said the bid his company submitted was for the Warri Refinery, which was close to the Seplat facility (his company). “We may not place our crude for export again if we have a refinery facility in Warri and what this means is that all our crude will be able to meet the local needs for refined products.
And if we do not get the contract, no problem, we would go on with our upstream business,” he said. Earlier, Minister of State for Petroleum Resources and Group Managing Director of the NNPC, Dr. Ibe Kachikwu, had said that the corporation was in talks with Chevron, France’s Total and Italy’s ENI to revamp the refineries, but promised to launch a separate tender in order to attract maximum number of bids.
The NNPC launched the bidding in a tender late April, stating that investors would be paid from proceeds from the sale of refined products. NNPC, according to the tender, was seeking partners for joint ventures to “fund, rehabilitate and jointly” operate the 210,000-barrel-per-day Port Harcourt Refinery, the 110,000-bpd Kaduna Refinery and the 125,000- bpd Warri Refinery.”
The revamp of refineries was part of reforms started by President Muhammadu Buhari last year to overhaul the NNPC, whose opaque structures have allowed corruption and oil theft to flourish. The NNPC, Kachikwu said in a reaction to plans to re-position the oil corporation, was also in talks with oil companies and banks to raise capital for new drilling and to repay its debt. Meanwhile, oil and gas experts have urged the Federal Government to allow the country’s refineries run by private investors to work optimally.
Chairman of PETAN, Mr. Bank-Anthony Okoroafor, told New Telegraph that the government has no business running refineries. “Refinery business is a business on its own; governments do not run such businesses. It was good at the initial stage for government to kick-start such investments and be able to build capacity.
“Nigerian government, or any government for that matter, has no capacity to run refineries,” he said in a prepared speech at a closed-door meeting in Houston, which was obtained by this newspaper at the weekend.
Okoroafor said that it was illegal and criminal for foreign oil companies to get jobs in onshore and swamp in Nigeria when competent indigenous companies are available. He said that the association is keen in achieving value added local content that gives values to Nigeria and Nigerians.
“There is a Nigerian Content Law, which states that onshore, swamp 100 per cent of the jobs should be given to Nigerian companies. So, any job that can be done by PETAN Company or by a competent Nigerian should not be given to somebody outside the country, it is criminal,” Okoroafor said.
Okoroafor recalled that during the militancy days, foreign expatriates fled the oil-rich Niger Delta while indigenous company workers continued with their production without fear of being kidnapped.
“Nobody can develop our country better than we can do. But anywhere that the capability does not exist in-country, anybody can do the job. “But where the capability exists, it has to be done by a Nigerian company,” the PETAN chairman said. He recommended regional distribution in the government’s efforts to boost Nigeria’s refining capacity.
“On improving domestic refining capacity, I think with the drop in oil prices and the constraints we have on locally produced petroleum products, it is actually important to develop our domestic refining capacity because it helps us to develop and re-think our process.
“Already, we have been seeing a lot of steps in that direction. Modular refineries have been licensed, many of them have completed their detailed engineering, and moving ahead to start construction very soon,” Okoroafor said.
