Group Seeks Probe of NNPC On Planned New Greenfield Refineries
By Olumidagreaton October 31, 2018
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President Muhammadu Buhari has been asked to investigate the reason behind the abandonment of Nigeria’s greenfield refineries earlier announced for Kogi, Bayelsa, and Lagos States for which feasibility studies had already been fully paid for and completed.
In a statement, Nigeria’s civil technology organisation, BudgIT said it was wrong for the government to plan another round of greenfield refineries project while the one it spent huge scares resources to conduct feasibility study were abandoned at the point of construction.
The state-run oil firm Nigeria National Petroleum Corporation (NNPC) recently announced plans to construct two 100,000 bpd greenfield refineries in Delta and Imo States.
According to Gabriel Okeowo, BudgIT’s Principal Lead, “It is wrong for any government institution to tease citizens with announcements for greenfield crude oil refineries, award huge sums for feasibility studies, abandon the project when it’s time for construction, then repeat the cycle in another state.
He said what guarantees do citizens have that taxpayers’ money earmarked for the refineries in Imo and Delta state will not suffer the same fate as those spent on Kogi and Bayelsa States? What are the lessons learnt from Kogi, Bayelsa, and Lagos greenfield projects? Can these lessons be made public?”
The NNPC exports a large portion of the 445,000 bpd of crude oil allocated to domestic refineries through Crude Oil Lifting contracts (COL) largely due to (1.) NNPC’s inability to make existing refineries work – despite monies spent on turn around maintenance, and (2.) the failure of NNPC’s new, greenfield refineries to see the light of the day – despite monies spent on them.
The organisation in the forefront of transparency in government finance noted that In the past, NNPC has been accused of carrying out its export of unused Domestic Crude Allocation (DCA) through politically-connected middlemen – many of whom do not have adequate capacity to handle the volume of crude oil in their Crude Oil Lifting contracts but simply extract rent and pass the contract on to those who do.
The Minister of State for Petroleum Resources, Ibe Kachikwu had previously promised to cut out the rent-seeking middlemen the award of Crude Oil Lifting contracts and also to cut down the number of contractors to sixteen (16) when he was the GMD for NNPC.