Page 12 - DMEA Week 41 2021

DMEA REFINING DMEA

Nigeria orders probe

into refinery contracts

AFRICA NIGERIA’S House of Representatives (HoR) this He added: “The glaring deliberate abuse of
week ordered an investigation into the award by the Nigerian Content Development Act by the
the Nigerian National Petroleum Corp. (NNPC) NNPC and the contract awarded to foreign com-
of contracts for the refurbishment of the Warri panies have caused untold economic hardship
and Kaduni refineries. to indigenous contractors who employ Nigerian
The motion follows allegations by Henry citizens.”
Nwawuba, deputy chairman of the HoR’s Com- However, it is worth noting that at least $1bn
mittee on Niger Delta Affairs that the contracts of the funding of the refinery works was provided
were awarded to Italy’s Saipem and subsidiary as a loan from Cairo-based African Export-Im-
Saipem Contracting without either company port Bank (Afreximbank), with a condition of
having submitted their local content plans for the agreement being that NNPC hire a “profes-
the project nor its longer-term maintenance. sional operations and maintenance company to
The contracts for Warri and Kaduna, worth maintain the refinery”.
$898mn and $587mn respectively, were awarded This stipulation was made on account of the
in August for rehabilitation of the refineries to state oil firm’s poor track record of running refin-
their 125,000 barrel per day and 110,000 bpd eries. The company has since announced it will
capacities over three phases spread over 77 no longer operate any of its three units, which
months. together have a throughput capacity of 445,000
This followed the award to fellow Italian firm bpd.
Maire Tecnimont of a $1.5bn engineering, pro- The contracts were awarded following a ten-
curement and construction (EPC) contract in der launched in May for operations and mainte-
April to overhaul the country’s largest refining nance (O&M) services for the facilities, covering
facility, the 210,000 bpd Port Harcourt complex. short- and long-term production and operations
This is seen returning the units to 90% of their planning, production and operations execution,
nameplate capacity by Q4 2022. monitoring, and reporting and optimisation of
Nwawuba said that in its current form, fol- operations.
lowing the completion of the Warri and Kaduna The scope also involves process and control
projects, the Italian contractors would remain engineering, quality control, quality assurance
in a maintenance capacity, meaning that “all the and laboratory, environmental management and
money spent by NNPC in that regard would be planning and execution for long-awaited turna-
transferred abroad, thus leading to capital flight”. round maintenance (TAM).™

P12 www. NEWSBASE .com Week 41 14•October•2021