$700 Million is Needed to Upgrade Our Refineries, And We Don't Have it - FG

The Federal Government has said that it
would need the sum of $700 million to
upgrade the nation’s refineries to be able
to perform up to 90 per cent capacity.
The Minister of State for Petroleum, Dr.
Ibe Kachikwu, disclosed this on Saturday
when he visited Eleme Local Government
Area of River State for the
re-
commissioning of the crude line from
Bonny to the Port Harcourt refinery.
Kachikwu explained that though Nigeria
was currently not having such amount to
upgrade the facilities, the country was
embracing a creative way of bringing in
investors.
He pointed out that such investors would
work with Nigerians on the ground to
reactivate and upgrade the refineries,
adding that the investors would be paid
through the flow-out of refined products.
The minister said, “We are not inviting
foreign partners to take over the refineries;
we do not have the funds. Even now that
they (refineries) are working, they are
probably working at about 60 per cent
capacity. We need to upgrade these
refineries and let them develop to the
point where they can perform up to 90 per
cent capacity. Total investment for that is
up to $700 million and we don’t have that
(money). Let us be honest about it.
“So, the best thing to do is to find a very
creative way to bring in investors, who will
come in, work with our team here, who
have the skills, reactivate and upgrade
facilities in this place and help us provide
technical support and they would be paid
through the flow-out of the refined
products over time. There is no confusion
about what they are coming to do; they
are not coming to run the refinery. They
are coming to provide funds to take our
performance on these refineries to 90
percent and to provide us with technical
skills. So, the areas of intervention will be
funding and technical support.”
Kachikwu apologised to Nigerians for the
challenge being faced due to scarcity of
fuel.
Explaining that the Federal Government
was putting measures in place to tackle
the problem of fuel scarcity, Kachikwu
stated that the government was not going
to give up on the issue.
He observed that while the refineries were
currently producing 12 million litres of
Premium Motor Spirit (petrol), the nation
consumed about 45 million litres a day.
Meanwhile, the Federal Government on
Saturday re-commissioned the Escravos-
Warri-Kaduna pipeline and announced that
both Warri and Kaduna refineries were now
receiving crude oil simultaneously for the
first time in many years.
According to Kachikwu, the refinery in
Warri has started working while Kaduna’s
will start production at the end of the
month.
The Group General Manager, Group Public
Affairs Division, NNPC, Garba-Deen
Muhammad, in a statement issued in
Abuja, quoted Kachikwu as saying that for
the first time in many years all the three
refineries and major crude pipelines in
Nigeria will be working at the same time.
The minister described the Escravos
terminal as the heartbeat of the
downstream sector and critical to local
supply of finished petroleum products,
adding that both refineries in Warri and
Kaduna were majorly fed from Escravos
crude stock.
Kachikwu said, “The challenge of this
country is the challenge of focus and
stewardship. For the first time in many
years the three refineries are going to be
working and it will help in a great deal with
the issue of fuel supply and distribution
across the country and will go a long way
to manage the fuel crisis.”
He enjoined Nigerians to be more patient
as the corporation was working hard to
end fuel shortage across the country.
“I appreciate the patience of Nigerians and
I am committed and focused to make
petrol available to all nooks and crannies
of Nigeria,” he said.