The Nigerian National Petroleum Company Limited (NNPC) has disclosed that it spent N100 billion on refineries’ rehabilitation in 2021.
The state-owned oil entity made this disclosure in its report on the funding performance for 2021 financial year.
Although the report did not list the refineries that gulped the amount, industry analysts believe that all the refineries under the company’s management, namely Port Harcourt Refining Company, Kaduna Refining and Petrochemical Company, and Warri Refining and Petrochemical Company, must have benefited from the maintenance funds.
In its latest funding performance report, the NNPC stated that N8.33 billion was spent monthly for a period of 12 months beginning from January to December 2021 on refinery rehabilitation as part of government’s efforts to bring the refineries back on stream and reduce the importation of refined petroleum products.
Available data on recent payments on the refineries’ rehabilitation showed that the Federal Government had processed $98 million and N17.2 billion as part payments for the ongoing rehabilitation of the Port Harcourt Refining Company.
The company’s funding performance 2021 report indicated, in the financial status update of the rehabilitation of PHRC as the project was financed by an equity contribution by its sponsor and loan by lenders (AfreximBank), that the government had made an initial payment of $194 million, being the 15 per cent advance payment required for the rehabilitation of the facility, to Tecnimont SpA of Italy.
The report further showed that the Engineering, Procurement, Construction, Installation, and Commissioning contract price remained at $1.397 billion with $162 million as provisional sum, bringing the total project cost to $1.559 billion, which was approved by the Federal Executive Council (FEC) on March 17, 2021.
The FEC approved the award of the PHRC EPCIC contract to Tecnimont in March, and the contract agreement was signed on April 6, 2021.
Also, the Minister of State for Petroleum Resources, Chief Timipre Sylva, announced at the end of the one of its meetings held in August last year that the FEC approved the sum of $1.48 billion for the rehabilitation of both Warri and Kaduna refineries.
The minister explained that the rehabilitation of Warri and Kaduna refineries would be awarded to Messrs Saipem SPA and Saipem Contracting Limited at a total cost of $1.484billion and that the facilities would be rehabilitated in three phases of 21, 23 and 33 months.
