Minister did the right thing the wrong way in PH refinery concession—Experts
Following the recent halt order in the concession of Port Harcourt refinery to a joint venture involving Italian energy giant, ENI and Oando, leading energy industry analysts have started looking at the matter and apportioning blame to the minister, Dr. Ibe Kachukwu.
Business Hilights recalls that the Senate Committee had halted the concession in reaction to some germane issues.
In an interview, a petroleum marketing expert, Mr. Joe Akinde said “Firstly, there was not enough transparency in the choice of ENI and Oando”.
“However, it is important to point out that the deal did not just come up. Recall there has been several trips to home countries of some of the International Oil Companies (IOCs) by the minister trying to convince them to buy in to the plan of the government to join in the repairs of the refineries.
“There seems to be no significant interest from any of them except for ENI of Italy. I believe that is why ENI was ‘selected’ in the first instance.
Also speaking on the matter, a downstream expert, Sani Daura noted that “Another angle to the Senate argument is that immediately the Minister made the announcement, industry groups rejected the involvement of Oando based on the fact that the Oando hardly participates in industry matters and does not belong to any of the industry unions. This made them not to be happy with the deal”.
On whether there is need for the entire deal to have passed through the BPE, he said “I don’t think there is a huge problem here. It is important to recall that there is not proper interest from any of the IOCs in the first instance to work on the refinery or repairs”.
Daura noted that “Even though there may be some local interest, they all lacked funding capacity to do the job. So when you run into an IOC that has the needed interest with funding powers, one is tempted to grab it”.
According to Dr. Chris Udeme, a tank farm engineer, he said “the Petroleum Ministry would have done the right thing which is going through the BPE”.
“No bid or concessioning process was allowed to drive the deal, thus making it statutorily invalid. There is confusion in the plan of the Minister in involving ENI in the repair of the refineries knowing full well that they are on a different mission of building a $15bn refinery.
“The new ENI refinery is expected to seat by the side of the existing refinery so that both the young and old will share facilities in a collocation format.
So on delivery, they will be managing their refinery and not the old one.
“I think some clarifications need to be made on the real role of ENI in the entire matter so that the Senate Committee and Nigerians will clearly understand what the Ministry of Petroleum meant in the involvement of ENI and Oando.
“Many industry experts are yet to understand what the Minister, Ibe Kachukwu is seeking to achieve.
Currently, refineries output has risen from 14% last year to about 36% this year.
The Senate order to halt the concession move would not have been necessary if the lawmakers had invited the Minister and all the players involved to explain their actions because such announcement indicates lack of coordination in policy direction and a bad signal to foreign investors.
