Mallam Mele Kyari, NNPC GMD
Speaking on Nigeria’s ailing four refineries that were working below capacity, Group Managing Director (GMD), of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, made it known at Channels Television, Politics Today on Wednesday, that it has become necessary to stop operations.
The GMD asserted that the refineries that have gulped millions in turnaround maintenance had to be stopped from operations and wasteful spending.
Responding to a question, Kyari said, “First, all the four refineries in three locations are shut down and it was a deliberate decision for two reasons. One is that delivery of crude oil to these refineries is completely challenged because the pipeline network has been completely compromised by vandals and all kinds of people that will not allow us to operate these pipelines.”
Kyari explained further, “That means you are not able to deliver crude oil to these refineries effectively to their maximum capacity. Secondly, what you call rehabilitation is different from the turnaround maintenance. Turnaround is routine which every refinery does but when you talk about rehabilitation, it is that colossal loss of capacity in the refinery and it means you haven’t done the turnaround maintenance properly.”
Thus, “Our estimate was to run it at 60 per cent of capacity but if you do that, all you are doing is value destruction. You will take $100 crude into the refinery and bring out $70 product. It doesn’t make sense.”
The NNPC helmsman added that refinery is supposed to operate at least 90% of its installed capacity, but this was not the case for these moribund refineries. Therefore, it is unreasonable to keep refineries despite the turnaround maintenance they have undergone in several years.
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