The controversy surrounding the commencement of the processing of crude oil from the Port Harcourt Refining Company will not be abating anytime soon as stakeholders have told The Point that heads must roll at the Nigeria National Petroleum Company Limited, if Nigerians were deceived about the production status of the complex.
Last Tuesday, Nigeria’s major oil company, the NNPCL, had told surprised Nigerians that it had fulfilled its pledge of re-streaming the Port Harcourt Refining Company. The NNPCL added that the action would signal the commencement of crude oil processing from the plant and delivery of petroleum products into the market.
As the icing on the cake, the NNPCL “revealed” that trucks had begun loading petroleum products which include Premium Motor Spirit or petrol, Automotive Gas Oil or diesel and Household Kerosene or Kerosene, while other product slates would be dispatched as well.
And to add a bit of fanfare, when the NNPCL made the announcement, its Group Chief Executive Officer, Mele Kyari, described the commencement of the load-out activities as “a monumental achievement for Nigeria which signifies a new era of energy independence and economic growth for the country.”
Kyari then dragged the name of the President of Nigeria, Bola Tinubu, into his celebratory speech, thanking the President for “his unwavering support and understanding towards the rehabilitation project (at the refinery) and for his persistence to ensure energy security for the country.”
“The truth is that heads will roll. They have allowed so many things to go unchecked just because there are no repercussions and no accountability”
However, what the NNPCL did not tell Nigerians then was whether the government’s two refineries in Rivers State, the Old Port Harcourt refinery and the New Port Harcourt refinery, had been integrated with one single terminal for product load-out.
Consequently, it did not take long before suspicion set-in and Nigerians wasted no time in questioning the validity of the information being peddled by the NNPCL concerning the PHRC.
The refinery’s host community, Alesa, was the first to question the NNPCL.
Under the auspices of the Alesa Stakeholders, the community criticised the portrayal of the Old Port Harcourt refinery’s operations, calling it a mere show.
The Secretary of the body, Timothy Mgbere, during a television interview, explained that only some units of the old refinery were operational and that the facility was functional at a skeletal level.
He stated that the celebration held at the Port Harcourt depot by the NNPCL was misleading, as it was based on the release of old stock from the storage facility rather than new production.
“They released that stock and then loaded six trucks and then televised it to Nigerians that it is the production from the old refinery. That is not true,” he said.
Mgbere also suggested that there was yet to be any integration between the Old and the New Refineries.
“What was the true picture? The old Port Harcourt refinery is built with its own utility, different from the new Port Harcourt refinery, in terms of tank farm.
“The tank farm that is servicing the old Pot Harcourt refinery has a different loading gantry at the depot.
“The party they had on Tuesday was held at the new loading gantry that is directly connected to the new refinery,” he said.
In a statement, last week Friday, the NNPCL spokesperson, Olufemi Soneye, lampooned Mgbere for his “scant knowledge” of how refineries work, stressing that the old and new Port Harcourt Refineries have since been integrated with one single terminal for product load-out.
Soneye said, “Mgbere claimed that the old Port Harcourt Refinery was only operating skeletally and was not processing PMS. His proof was that the PMS truck-out was done at the gantry of the new Port Harcourt Refinery as against the gantry of the old Port Harcourt Refinery.
“This betrays his scant knowledge of the operations of the refinery. The old and new Port Harcourt Refineries have since been integrated with one single terminal for product load-out.”
Many new reports making the rounds, however, indicate that there are no signs of activity at the refinery and that the edifice is undergoing calibration which might span till this week.
Workers at the refinery have also somewhat substantiated the claims made by Mgbere, the secretary of the Alesa Stakeholders that the loaded trucks shown to Nigerians were the old product that had been in the system.
Nigerians have, because of all the back-and-forth associated with the refinery, said that there is likely a political undercurrent to what is happening at the Port Harcourt refinery.
Analysts, too, say that past governments may have used past “re-openings” of moribund refineries in Nigeria to score cheap political points, and so Nigerians, with one voice, insist that the way forward is for the government to conduct a thorough investigation and hold anyone, if he or she is found wanting, culpable for any act of deceit in the refining capability of the refinery.
Asked whether Nigerians celebrated the news about the Port Harcourt refinery too soon, a senior lecturer in the Department of Petroleum Engineering, University of Benin, Onaiwu Oduwa, said, “Nigerians celebrated too early. At least we should have waited at least a week or two to see constant loading at the depot.
“What they (NNPCL) did could have been for a media show or it could have been that it was real. They have even put up a statement countering the community leader’s assertion, stressing that the man spoke out of ignorance and that the refinery is working. So, we need to wait and see to make sure that it is true.”
Onaiwu added, “You cannot spend about $1.5 billion – according to them – to fix a refinery and at the end of the day, you are making a mockery of everybody. There’s a loan they took and the loan needs to be paid back from the products from that place. So, heads should roll. The government should do the needful.”
Explaining why the situation is the way it is at the Port Harcourt refinery, Onaiwu said the NNPCL was under pressure to “deliver” on the refinery. He also said a lot still needs to be done, effort and engineering-wise, to get the refinery working.
“I think there’s pressure on the NNPCL to deliver on that refinery. They have moved the date for the commencement of loading almost five times. So, they are feeling that pressure trying to get Nigerians to see that the place is working.
“I know they are having issues because the refinery is old. They have a new refinery in the state. There’s the old Port Harcourt refinery and the new Port Harcourt refinery. And for them to fix the refineries, it was advised that those two should be sold as scrap instead of the government pumping money into them.
“Look at Dangote refinery, which is a new refinery. It took them a lot of time before they could get it to start producing. There are processes that it goes through, and even now, it is not 100 percent operational, and that’s for a new refinery.
“Then for an old refinery, they are trying to bring it back to life after years of neglect. A lot of things would have gone bad. First of all, it has undergone wear and tear and you have abandoned it for a period of time. So before you can get it fired up, to be able to start producing again, it will take a lot of effort and engineering. So, that seems to be the main problem with the refinery,” he said.
A current affairs analyst and clergyman, Reginald Anene, said, “Governments, particularly the Nigerian government, have lost the trust of the people, and we have more people who voted against Tinubu than people who voted for him. We are living in a climate of so much skepticism.
“So, whenever the government tells them anything, they want to double-check it.
“Under the Buhari government, we had the ‘abracadabra’ with the Nigeria Airways. So, because of that, people want to be sure that refineries are working and I wouldn’t blame anybody who is skeptical about the announcement by the NNPCL that the refinery is working.
“It behooves the government itself to prove people wrong by making sure that these products are available.
“At the Area 5 terminal, it was observed no operations taking place. A worker, who spoke anonymously, explained that the products being loaded were “dead stock” – leftover petrol, kerosene, and diesel stored since the refinery was shut down in 2015/2016”
“You cannot claim to have Dangote refinery running and then now the Port-Harcourt refinery working at a certain percentage and people have not felt the impact. But I will just cut the government some slack and say let’s wait for another one or two weeks, then the whole thing will become clearer.”
Asked whether heads will roll if it was established that Nigerians were deceived, Anene said, “The truth is that heads will roll. They have allowed so many things to go unchecked just because there are no repercussions and no accountability.
“How can the NNPCL take the whole nation for a ride by putting out, if it were a lie, that kind of statement? Just like I said, let’s give them some time. The truth is that the chicken will come home to roost – whether it is true or false, it will be unraveled in no time.
“In addition, if it is found to be a lie, the head of NNPCL, Kyari, should be relieved of his duty and the board of the NNPCL should also be fired.”
On the suspected political undertone of happenings at the refinery, Anene said, “We live in a very complex nation where you have so many vested interests and these interests are usually political in nature. And although the endgame is financial, we know that there are always political interests when it comes to behemoths like the NNPCL.
“And for decades, it was a cesspool of corruption, and it still is. I don’t think it has been cleaned up. It has also always been the cash cow for certain people. And obviously, they will not want to let go easily.
“We are talking about a sector that generates most of our foreign exchange earnings. We are talking about a sector where accountability and transparency is almost non-existent.
“And mind you, if the Port Harcourt refinery gets fixed, that will be the end for some people in terms of pilfering our common patrimony. It will be the end for them but believe you me, these people will definitely fight tooth and nail because a lot of them do not know any other business except oil business.
“And if you take it from them, they are almost useless.
“So, they will do whatever it takes to sabotage, postpone and if possible, make sure that the refineries don’t work. There’s indeed a political undertone.”
An energy expert, Nick Agule, also emphasised that the NNPCL must improve in transparent communications by releasing details of where Naphtha was procured from and revealing the current state of its distillation points to Nigerians.
He said, “The NNPCL needs to do more with communication in a transparent manner. They have to say the basics. The refinery that the NNPC is running is owned by Nigerians. We are the owners of this asset. They stated that the facility refines with products derived from Naphtha. But they didn’t tell us where they were getting it from.
“There are two scenarios. They could be getting Naphtha from somewhere, including import, in which case it’s a pure blending plant, or it may imply that they have fired on the distillation unit, introduced crude oil and they have produced Naphtha hence the NNPCL have to show us their distillation units.”
On his part, energy expert Bala Zaka questioned the rationale behind the company’s decision to store products without releasing their prices to the public, when fully aware it would come at an extra cost.
He also urged the company to reveal where its feedstock (crude oil) was procured from and the company supplying it.
He said, “Generally, when a company produces a product regardless of the type or time, whether it is biscuit or toilet rolls. The first thing you do immediately when products come out of production is to send them to the market. You send them out to customers.
“There is a concept in accounting called the Just In Time concept, when you apply this, there is no provision for a storage warehouse or depot. You would want to save the cost of storage. That simply means as the products are coming out of production, oil marketers are waiting to evacuate them, which is good for the facility and the industry because you won’t pay for storage.
“So when dealers are waiting for an organization to release their products and state their price and it is the organization that is holding back, then something questionable is there. There is something suspicious because ordinarily, you need to save costs of storage.
“Also, we have Nigerians who are practicing petroleum engineers and last week, we had our Annual General Meeting. I can tell you that there was no mention of the refinery at all. There is no way technicians or engineers who are sure it has been put into order or reached completion would not have hinted to us at the meeting that the refinery would soon come on stream. That is very strange. It is just like having a pregnant woman giving birth without anyone seeing the pregnancy. You can’t hide the progression.
The petroleum engineer added, “Fitting a refinery, trying to test it, and supplying initial feedstock can’t go without being noticed by anyone. How many people saw tankers, rail lines, or pipelines delivering crude to the refinery? If it is from an oil well, which oil wells are within that axis? NNPCL should tell us where it got its feedstock and for how long will the crude oil supply continue. They should also reveal the agreement signed with the crude oil supplying company.”
However, the Independent Petroleum Marketers Association of Nigeria said it finds it hard to believe that everything displayed so far by the refinery was a mirage.
The National Publicity Secretary of IPMAN, Chinedu Ukadike, said that the independent marketers would still believe the NNPC until the loading of PMS at the refinery fails to continue in the next few days.
According to him, the host community might be trying to settle personal disagreements with the refinery which IPMAN would not want to dabble into.
“Well, we are delighted that the refinery that had suffered multiple postponements has commenced. We are very happy about it. The mechanical and technical aspects of the refinery are what we don’t know.
“You can also notice that there is a kind of community problem based on the contract because the guy also contradicted himself talking about contracts and other things. So, these issues, we don’t want to dabble into.
“But we are ready to load petroleum products once NNPC reviews its price and is willing to sell to us. Now, they are only servicing their stations. So, our boys are ready. Our offices have been cleaned up. And we are waiting for product directives,” Ukadike said.
However, a visit to the facility on Friday by a newspaper revealed that the refinery was inactive, with workers on-site saying the facility was undergoing calibration, which could continue into next week.
At the Area 5 terminal, it was observed no operations taking place. A worker, who spoke anonymously, explained that the products being loaded were “dead stock” – leftover petrol, kerosene, and diesel stored since the refinery was shut down in 2015/2016.
He said, “Before the refinery was shut down between 2015/2016, we had dead stock left in the tank, including some Premium Motor Spirit (petrol), DPK (kerosene), and Automated Gas Oil (diesel).
“So, these products were in large quantities in stores in those tanks. During the rehabilitation of the Port Harcourt Refinery, Old Area 5, those products were evacuated from the tanks for storage.”
However, he pointed out that a significant amount of the refined petrol was “off-spec,” needing to be separated from water to achieve the desired quality and colour.
He said, “But for DPK, it is in large quantities, but they have not pushed it from the tank where it was kept after being refined, ready for commercial purposes.
“So, the product that was loaded was dead stock, that is the old product that was in the system. So, after these dead stocks, they will have to clean the tank, remove all the debris before pumping the new product into that tank, and redye it.”
The worker also criticised the refinery’s outdated systems, saying, “But what they are trying to do at the Port Harcourt Refinery is manual, which cannot match the new digital pumps. Most of the pumps used for the event were refurbished.”
He revealed that during Kyari’s visit, only five out of seven trucks prepared were successfully loaded with petrol.
