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As the Bluestar Consortium finally exercised their right of first reversal of the purchase of two of the nation’s existing “name-plate” refineries, should the Federal Government return the management of the three plants back to the Nigerian National Petroleum Corporation (NNPC)? And should the new government probe the activities of the nation’s apex oil concern from 1999 to May 2007? Controversies generated by the above questions have greatly moved the focus on the reversed sale of the refineries to what could rightly be described as public outcry against NNPC as a manager of the nation’s oil business especially the refining and distribution sub-sectors of the downstream. In a reaction to the public outcry that greeted the sale of Kaduna and Port Harcourt refineries to Bluestar consortium, the President, Umaru Musa Yar’adua in what could be rightly described as a public relations road show tasked the NNPC to raise the production level of the country’s refineries to at least between 80 per cent of their installed capacities by the end of the year. Though he did not explain what he meant by the order and how he expects the NNPC to achieve the feat, from all indications, President Yar’adua never meant what he said. If NNPC has the capacity or rather will-power to realize the challenge, why has the corporation not been able to resolve the problem in the refineries for over eight years? Availability of petroleum products is a matter that touches directly on the everyday lives of ordinary or rather real Nigerians and deserves to be treated without sentiments. Obviously not happy with the fuel supply situation in the country especially the handling of the affairs of the NNPC by the corporation’s top management, some sections of the Nigerian Labour Congress have warned that the withdrawal from the purchase/sale of the nation’s refineries was not yet an occasion for any celebration by NNPC until the present administration addresses the problems that kept the refineries from working to produce fuels. This is the Labour mindset. Nothing could have been closer to the truth than the NLC declaration that there is no way petroleum products would be available and affordable for the real Nigerians if the downstream refining operations are left at the mercy of the technically corrupt NNPC officials and their collaborators in the Presidency whose preferences are for imports as opposed to local production. The frank question is: Can the old forces of import within the NNPC make and/or allow domestic refineries to work optimally? The answer is a big No. Port Harcourt (coupled), Warri, and Kaduna refineries have processed more controversies and eternal turn- arounds than actual production of fuel distillates. Warri was technically still-born as a result of the untested process technology supplied by a vendor- Eni’s Snamprogetti of Italy and ever since, NNPC officials have used crude feedstock supply disruption to divert attention from a management blunder in the selection of the appropriate technology for the Warri plant. This defect at in the plant has been responsible for the failure of the eternal turn-around maintenances to produce any meaningful results. Kaduna also has been battling with another technical blunder by NNPC. The plant was built to run on heavy crude and this has been responsible for the evacuation of the heavy distillates which blocks smooth operation of the plant. Meanwhile, the NNPC as administered from the Presidency by the Obasanjo-led government deceived Nigerians using vandalisation and Niger Delta protest to explain the near-zero performance of the two refineries. Characteristically, the nation’s three refineries have been tipped for award of excellence in shameful process losses which could be rightly described as criminal, excessive unit operating costs which mostly is fictitious, bloated overheads including ghost workers, inside sabotage to aid and abate crude oil and products theft, and deliberate initiatives to make sure the plants doesn’t work. The curious aspect of the sorry state of the level of corruption and fraud in the NNPC is that, the act experienced an accelerated increase in magnitude and sophistication even as the former president, Chief Obasanjo opted to directly supervise the corporation in his attempt to address the menace, The essence of establishing refineries by OPEC countries like Nigeria is to achieve product availability, reasonable or rather appropriate pricing taking cognisance of the socio-economic setting of such nation. Also, such initiatives were supposed to help enhance the local content and skill acquisition in the subsector, employment creation and capacity absorption. Regrettably, NNPC particularly this crop of the corporation’s very top management cannot point to a single beacon of success in the set goals. So the call by Labour for a panel of enquiry to probe the activities of the NNPC between 1999 and May 2007 was apt. In a matter- of-fact declaration, the union said the panel has become necessary to uncover those behind the non-workability of the refineries and institutionalisation of the culture of 100 percent importation of petroleum products for the country. If the management of NNPC is convinced that it has the capacity to perform, why has the corporation all these years been so comfortable with 100 percent importation of fuel products rather refining locally? Why is the NNPC more interested in exporting raw crude oil to neighbouring countries for refining and afterward brings back the products as imported or offshore bridging at exorbitant prices with all the jargons of appropriate pricing and levels of subsidization? Obviously Labour spoke the minds of the Nigerian people when it challenged the Government to tell Nigerians who handled the contract for the turn around maintenance of the nation’s refineries whose cost was put at about $2 billion, with all the variables. It is a known secret that the powerfully entrenched forces of mafia importers of petroleum products, petrochemicals, and influence peddling middlemen associated with the Presidency especially the Obasanjo presidency have been responsible for the problem of repairs and cyclic -for - nothing turn around maintenances of the plants. Comments in the media from both sides of the argument no doubt, have shown that there were some mix-ups in the issues surrounding the public protest against the sale of the refineries to the Bluestar consortium. From a clear understanding of the entire argument, no single Nigerian whether Labour or government is against the Bluestar Consortium’s purchase of Port Harcourt and Kaduna refineries. The crux of the outcry was the manner in which the former president, Chief Obasanjo ceded out the two refineries few days to his stepping down from office. From all indications, the award short-circuited due process which raised the question of transparency and actual intention of the deal. The contest actually was against the dictatorial manoeuvring of due process by the retired president, Chief Obasanjo. Must the former president be the one to privatise the facilities? We are supposed to have continuity in Government especially when it was just a change of batch in the same gang, so why the late night hurry to fling the assets? The current controversy would have been averted if not that a particular leader thought that no one else can be as wise enough to take decisions for the betterment of Nigeria. On the other side of the coin, it is rather very curious that all the clamours for private sector participation in the nation’s downstream oil sector have zeroed into cash-and-carry acquisition of already existing facilities especially refineries and petrochemical plants. What prevents the private investors from establishing their own refineries? Must they participate in the sub-sector by grabbing NNPC’s facilities? Obviously, there is something very wrong in our perception of privatization as packaged and implemented by the Obasanjo-led administration. The interesting thing is that most of the aggregating companies under the Bluestar constriction have already being awarded licenses to build privately-owned refineries. The question is: Why are they more interested in acquiring the NNPC-owned refineries than building theirs? This question has become more pertinent now that the NNPC has refused to relinquish its ownership of the three existing refineries. From obvious reasons, the country would be far better served in terms of supply of fuel products if the private interest groups are encouraged by the Federal Government to build and operate their own refineries which would either run along side or run out of business those of the NNPC as the corporation has been alleged to be incapable of managing the plants at optimal production levels. To compel the NNPC to either perform or be phased-out of business, the Federal Government should, after the six months funding grace period already given complete stop funding the corporation. NNPC can and should generate funds to carry out what ever maintenance or expansion work it sets out to do. If NNPC is to be what it was set out to be, government should be coming to the corporation to borrow money rather than the current reversed situation. Also, government should revisit the piles of licenses already issued for private refineries. What has happened to those awardees? Do we have new batch of interested investors in the refining sub-sector? If the first set is no longer interested, government should withdraw the licenses and give them to more zealous private participants in the sector. IFEANYI IZEZE IS A PORT HARCOURT-BASED ENABLING ENVIRONMENT CONSULTANT (iizeze@yahoo.com)
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