Refineries probe: Reps kick as Kyari keeps mum on oil swap deal
EMERGENCY DIGEST- THE Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, on Tuesday, finally appeared before the House of Representatives’ Ad Hoc Committee on the State of Refineries in Nigeria.
However, Kyari could not answer some of the critical questions posed to him by members of the committee, urging the lawmakers to allow him to come back with documents containing the details.
The details sought by the lawmakers include the actual cost of rehabilitating the refineries, especially the Port Harcourt Refining Company.
This is just as the committee and the GMD failed to disclose the quantity of crude being taken from Nigeria and the volume of petroleum products being delivered to the country on a daily basis, under the Direct Sale Direct Purchase or oil swap deal with firms.
In his presentation, Kyari said, “We recognise that today, none of our refineries are operating for a very obvious reason that I am sure, through the work of this committee, you will find out why they are not operating today. We will hide nothing from you. We will also tell you where we are as we speak.
“Needless is to say that the refineries were essentially not properly managed over time, not just today but in the last 20 to 25 years. The turnaround maintenance processes were clearly mismanaged over time. We clearly admit that those turnaround maintenances were not properly done in the past, leading to where we are.
“When we took over, it is very obvious that what you are dealing with is not turnaround maintenance; you are dealing with a total rehabilitation. The refineries were clearly in situations where ordinary turnaround maintenance would not solve the problem. We have degradation of a monumental proportion that we met. And of course, the only way you can do this is to conduct full turnaround maintenance.”
Kyari also noted that the refineries were shut down as the country was running at a loss using them. He also said the NNPC shopped for “the best of class” contractors to rehabilitate the facilities.
He said, “We did not abridge any process. We took through all the necessary processes of governance to make sure that we have the right contractor in place. And I am happy today that at the end of that exercise that we have put in place, the Federal Executive Council has approved a contractor for the Port Harcourt refinery, the Kaduna refinery and the Warri refinery.
“Even when you rehabilitate the refineries, you must have the pipelines. As we speak now, the pipeline from Escravos, which will feed the Warri refinery and ultimately the Kaduna refinery cannot carry the two refineries as we speak now. This is for many reasons; one is the act of vandals.
“Needless is to say that the rehabilitation work must also be complemented with the replacement of the pipeline network. We are also working on this. It is a very critical component of what we are doing.”
The GMD also noted that the rehabilitation projects would be financed by banks, different from the previous efforts which were frustrated by funding challenges.
A member of the committee, Olanrewaju Edun, however, said Kyari did not speak to the document the NNPC presented to the panel, noting that what the GMD said was not captured in the written presentation.
Responding, Kyari said the committee should adopt his oral presentation also. “We have nothing to hide, that is why I said everything I could remember,” he said. Other members of the committee, however, insisted on getting the details demanded from the NNPC.
Another member, Ayokunle Isiaka, asked if the NNPC was changing the entire structure and systems of the refineries or changing some specific parts. He demanded an asset valuation report on the refineries. He also asked how refined products would be transported from the refineries when they become functional to the depots for onward distribution.
Chairman of the committee, Ganiyu Johnson also said, “It is very important for you to tell us the actual cost of this (Port Harcourt refinery rehabilitation) contract. If there are fluctuations (variations), the original contract sum, we should know.”
Responding, the GMD said, “Chairman, I didn’t say I did not have answers to all the questions but it is very obvious that we did not respond to all the questions – the requests – that this honourable committee asked us to do. If we had done so, many of the questions that were asked today wouldn’t have come up in the first instance. That is why I said give me the grace so that I can respond to all the submissions that you have requested and I would clearly come back to you as you directed.
“Secondly, we know the contract sum. We are hiding nothing from you. There is no variation on this contract. If you look at the document I submitted to you, you will see the approval is for $1.559bn including VAT. So, there is no question that we do not have an answer to. I don’t have all the details; I will not be able to have all the details, definitely.”
Johnson also asked, “What is the quantity of crude oil given out per day under the DSDP programme to refiners outside this country? Two, what is the quantity of PMS received per day in exchange for the quantity of crude oil swap?”
Responding, Kyari said, “Definitely, these are very specific numbers and there is no way I can give you a number on these, at this moment. First, let me tell you the principle around this. I know today, how much PMS we have in the country. I know we have up to 2.8 billion litres of PMS in the country at this moment, sufficient to keep us for 47 days if we don’t import.
“This is the basic information that I know. And all the PMS don’t come in equal volumes every day. Some days you can receive cargo and for three days may not receive cargo, and you can also receive up to four cargoes in a day. This is market-determined, supply-determined; you cannot give the volume for every day but we have data for every volume of PMS.”
He added, “I have nothing to hide from this committee or any committee of the National Assembly. I have the responsibility to disclose everything I know to you and to Nigerians. I have the responsibility, by duty and obligation, to make sure that I don’t hold back any information.
“I do not know everything and of course, no one does. Everything that I know, I will tell you.”