Refineries perform below 20% as losses persist
The consolidated performance of three of
Nigeria’s refineries in Warri, Kaduna and Port Harcourt is below 20 per
cent, the latest financial and operations report of the Nigerian
National Petroleum Corporation has shown.
Similarly, the loss in revenue by each
of the facilities has continued to drag despite the steady amount of
crude oil they are taken it.
An analysis of the latest ring-fenced
refineries performance in August 2016 as released by the NNPC showed
that the precise consolidated capacity utilisation of the three
refineries was 19.9 per cent.
The three refineries are the Warri
Refining and Petrochemical Company, the Kaduna Refining and
Petrochemical Company, and the Port Harcourt Refining Company.
The report further stated that the
consolidated revenue losses of the three facilities dropped from the
5.13 per cent in July to 3.23 per cent in August.
On the individual performance of the
refineries in August, the NNPC said the capacity utilisation of the WRPC
was 14.28 per cent of crude oil plant capacity of 125,000 barrels per
day.
The capacity utilisation of the KRPC and
the PHRC was put at 18.78 per cent and 19.52 per cent, while their
plant capacity was 210,000bpd and 110,000bpd, respectively.
The report stated, “The total crude
produced by the three local refineries for the month of August was
359,081 metric tonnes (2.63 million barrels), compared to crude
processed in July of 126,756MT (929,275 barrels).
“For the month of August, the three
refineries produced 328,314MT of finished petroleum products out of
356,081MT of crude processed.”
The NNPC, however, explained that the
improved capacity utilisation of the facilities was due to the success
achieved by the domestic refineries.
It said, “For the first time in several
months, the three refineries operated concurrently despite crude
pipeline vandalism in the Niger Delta region. However, the three
refineries continue to operate at minimal capacity.”
Some stakeholders in the oil and gas
sector have called for the sale of the country’s refineries, while
others urge the government to desist from providing incentives to the
facilities.
For instance, while speaking during the
Second Presidential Economic Communication Workshop in Abuja on
Thursday, the Chief Executive, Economics Associates, Dr. Ayo Teriba,
stated that instead of providing incentives to refineries, the
government should partner private investors in joint ventures to revamp
the facilities.
He said, “There shouldn’t be incentives
for refineries. If incentives could not help out in the Nigeria
Liquefied Natural Gas, why do you think it will work out in refineries?
Government can go into joint venture with investors on refineries. It
opened up the space in the telecoms sector and we know how that sector
has grown. It should do so for refineries.”
In the road map for the oil and gas
sector tagged Seven Big Wins unveiled recently by President Muhammadu
Buhari, the Federal Government stated that it would spend between $1.4bn
and $1.8bn to rehabilitate the country’s refineries within two years in
a bid to reposition the industry.
It stated that the rehabilitation would
be carried out with the participation of the private sector as the road
map represented the short and medium-term priorities to grow the
Nigeria’s oil and gas industry from 2015 to 2019.
Part of the implementation strategy of
the road map is for the government to ensure integrity assessment of all
existing refineries and formulate investment plans to refurbish the
facilities and improve their capacities.
The government, in the report, said the
short-term objective within two years would be the execution of a
comprehensive rehabilitation programme under private sector
participation to improve operations and increase capacity utilization.
