Page 5 - DMEA Week 12 2021

DMEA COMMENTARY DMEA

Abubakar said on social media: “We cannot as a why you wouldn’t build a new refinery. We have
nation expect to make economic progress if we also seen some curious comparisons that shell
continue to fund inefficiency, and we are going sold one of its refineries for $1.2 billion and that
too deep into the debt trap for unnecessarily it’s even better than our own.
overpriced projects.” Meanwhile, the exec created some confusion
He added that with national debt having
grown from $31bn in 2015 to $87bn now, “might by saying that the latest TAM at Port Harcourt
we ask if there was a public tender before this cost was carried out in 2000 and the high cost of the
was announced? Was due diligence performed? new programme was caused by the previous
Because we are certainly not getting value for TAM being poorly executed.
money. Not by a long stretch. Assuming that the project proceeds as
Meanwhile, with the country’s history of planned, Nigeria would be set for a major refin-
announcing refining deals that fail to come to ing rebirth, with the Dangote unit expected
fruition, former chief economist of Nigeria’s on-stream next year, one 5,000-bpd modu-
Labour Congress Dr. Peter Ozon-Eson urged lar refinery already in operation with another
the government to ensure a guarantee that the 14,500-bpd of capacity to be added by two fur-
rehabilitation work is carried out in record time. ther modular units, and Port Harcourt adding a
He added that with the 650,000-bpd Dangote further 200,000 bpd by mid-2023. From the cur-
expected to come into operation soon, “we need rent 5,000 bpd serviceable throughput capacity,
other refineries so that we are not subject to a the country could be home to a total of nearly
monopolistic refinery”. 870,000 bpd of refining capacity within two
years.™
Defence
In response, NNPC managing director Mele
Kyari jumped to the defence of the initiative,
laughing off comparisons by the press between
the rehabilitation of Port Harcourt and the sale
of a US refinery by Shell for $1.2bn, noting that
the units could not be compared on the grounds
of age and capacity.
Meanwhile, he also disagreed with sugges-
tions that the existing refinery could be scrapped
and replaced with another for the amount being
paid for the revamp. He said that building a new
unit of similar class to the existing Port Harcourt
complex would cost the government $7-12bn
and take up to four years to complete.
He said that the “real cost” of the rehab work
is $1.34bn. “Even then you could argue and say

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