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FG’s collaboration with S’Arabia to revamp refineries raises questions

Last week Wednesday, the Federal Government said it would collaborate with Saudi Arabia to revamp moribund refineries in Warri, Port Harcourt and Kaduna.
Minister of State for Petroleum Resources, Ibe Kachikwu, had said that Nigeria was currently tapping from the vast experience of Saudi Arabia, adding that both countries would take strong business decisions on the matter in due course.
The Minister had spoken at the Abuja headquarters of the Federal Ministry of Petroleum Resources while playing host to the Minister of Oil and Energy for Saudi Arabia, Khalid Al Falih.
Whereas the Minister revealed that Federal Government had discussions with the delegation with respect to refineries during a press conference at the ministry, industry pundits have started picking holes in the entire stories surrounding plans to revamp the refineries.
According to experts who barred their mind on Wednesday, the utterances of the Minister clearly suggest that contrary to his earlier claims that government will soon announce contractor-financiers for the four moribund refineries, nothing may have been happening after all.
They argued that if the Minister who had few weeks ago, announced that government will soon announce investors who will revive the refineries as talks nears conclusion is now telling Nigerians that the Saudi Arabia oil chiefs will soon take decision on the refineries, it means that nothing has been happening and Nigerians are being driven around for nothing.
It would be recalled that Kachukwu had few months ago, announced that government is about to conclude talks with Agip-Eni Group, Italy on the matter, later, he changed and mentioned that government will privatise the facilities.
However, objections grew and forced government to change narrative that it will approach National Assembly to seek approval for another $1.8bn to carry out another Turnaround maintenance (TAM), but the lawmakers queried whereabouts of the initial $2bn used for the same refineries without any meaningful results.
Accordingly, the request was turned down, thus forcing the Ministry and NNPC to start thinking outside the box which lead to the thinking of strange contractor-financier model.
The entire stories surrounding the failed refineries are becoming messier as the Minister is jumping from the contractor-financier model to yet another unexplainable revival plot involving the Saudi Arabian energy ministry.
Business Hilights that the Minister had noted at the meeting that “As you know, the refineries have been very close to my heart. So, I did bring up the issues of experiences that we’ve had so far and he shared his own experiences in terms of successes that they’ve had.
“We’ve got an understanding to come look deeper into how they’ve done their own trajectory to get to where they are today and what experiences we can pick from there. No formal things agreed yet, but there is the willingness to collaborate and learn from one another. These are usually very strong business decisions and at the appropriate time, we will nosedive into the details of that.”
Kachikwu further stated that the meeting with the Saudi delegation was with respect to the current outlook in the global crude oil market, adding that Nigeria and Saudi Arabia, as members of the Organisation of Petroleum Exporting Countries, need to look at the prevalent dynamics in the crude market.