A total loss of N104.3bn was recorded by Nigeria’s refineries in 13 months, even as the facilities refined no crude oil throughout the period, the latest report released by the Nigerian National Petroleum Corporation showed.
An analysis of the updated consolidated refinery financial performance from February 2020 to February 2021 showed that the plants maintained losses monthly.
The NNPC manages Nigeria’s refineries, namely Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company.
Figures from the corporation showed that the monthly operating expenditures of the refineries surpassed their revenues all through the 13-month duration.
In February, March, April, May, June, July and August 2020, the consolidated losses of the refineries were N9.36bn, N10.3bn, N9.69bn, N9.55bn, N10.23bn, N9.1bn and N7.1bn respectively.
In September, October, November and December 2020, the facilities posted cumulative losses of N7.04bn, N5.49bn, N5.99bn and N8.28bn respectively.
Their consolidated losses continued in 2021, as they lost N5.37bn and N6.88bn in January and February this year, being the most recent update from the corporation.
This came as the oil firm’s latest report further showed that all through these months, the refineries were unable to refine crude oil.
Providing an explanation for this, it said, “In February 2021, the three refineries processed no crude and combined yield efficiency is 0.00 per cent owing largely to ongoing rehabilitation works in the refineries.
“The declining operational performance is attributable to ongoing revamping of the refineries, which is expected to further enhance capacity utilisation once completed.”
The NNPC further explained that it had been adopting a merchant plant refineries business model since January 2017.
It said the model took cognisance of the products worth and crude costs, as it noted that the combined value of output by the three refineries (at import parity price) for the February 2021 amounted to approximately N0.10bn.
It added that there was no associated crude plus freight cost for the three refineries in February 2021 since there was no production, but observed that operational expenses amounted to N6.98bn.
“This resulted to an operating deficit of N6.88bn,” the oil firm said.
The Group General Manager, Group Public Affairs Division, NNPC, Kennie Obateru, recently said the $1.5bn rehabilitation of the Port Harcourt Refining Company had commenced in full and part of the facility would start delivering refined products by September next year.
He told our correspondent that the entire rehabilitation programme would be over in 44 months, stressing that the contractor had already mobilised to site.
The NNPC officially signed the contract with Tecnimont SPA for the $1.5bn rehabilitation programme of PHRC on April 6, 2021, and parties in the agreement announced the commencement of the project.
“It (Port Harcourt refinery) will be completed within 18 to 44 months when counting from April this year. By 18 months some part of the refinery will be producing,” Obateru said.
Also, oil marketers had urged the corporation to try and hasten the rehabilitation exercise of refineries, particularly the revamp of the Port Harcourt refinery.
The President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said, “If the refinery in Port Harcourt can be rehabilitated and it works and comes on stream in a swift manner, that will be a welcome idea.”
He said it was high time the country started refining crude oil, as this would not only create employment but would impact positively on the overall economy of Nigeria.