Eko Hot Blog reports a former Group General Manager of Planning at the defunct Nigerian National Petroleum Corporation (NNPC), Babajide Soyode, has raised concerns about the Nigerian National Petroleum Corporation Limited’s (NNPCL) demand for a $2 billion turnover from potential operators interested in taking over the Port Harcourt Oil Refining Company.
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Soyode, a chemical engineer and technical consultant to the Dangote Oil Refinery, expressed doubt that any private operator would be willing to acquire the newly rehabilitated oil refinery under such conditions.
In an interview, Soyode questioned the logic behind the $2 billion requirement, stating, “How will you be asking me to have $2 billion to run the refinery? What is the value of the refinery that I must have $2 billion? How many service companies have $2 billion? I thought they were serious; they are not serious.”
The NNPCL recently announced its intention to engage reputable operations and maintenance companies for the Port Harcourt Refining Company to ensure reliability and sustainability in meeting the nation’s fuel supply and energy security obligations. However, the demand for a minimum average annual turnover of $2 billion for the financial years 2019, 2020, 2021, and 2022 has drawn criticism.
Soyode suggested an alternative approach, stating, “NNPCL should still have substantial equity, but not controlling equity. That’s the only way forward. There is nothing wrong with the refineries. There are much older refineries in Houston, all over the world.”
He further criticized the decision to rehabilitate the refineries instead of upgrading them, emphasizing that the deterioration was due to management rather than the age of the facilities.
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Soyode recommended merging the ‘moribund’ refineries in Port Harcourt, Warri, and Kaduna, privatizing 65% of the equity while allowing NNPCL to retain substantial but non-controlling equity.
The debate over the terms and conditions for private operators to take over the government-owned refineries continues, with stakeholders expressing various opinions on the feasibility and fairness of the requirements.
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