October 29, (THEWILL) – The decision by the Senate to investigate the humongous expenditures on fixing Nigeria’s dormant refineries, has added weight to concerns about the lawmakers’ indulgence in theatrical probes.
The Senate on October 24 constituted an ad-hoc committee to investigate all contracts estimated at over N11.35 trillion awarded for the rehabilitation of the four moribund refineries in the country.
While presenting his motion, Senator Sunday Karimi (Kogi West) averred that from 2010 till date, the Nigerian Government had spent N11.35 trillion on contracts to rehabilitate the four refineries, but they are still unproductive.
“Between 2010 to date Nigeria is estimated to have spent N11.35 trillion (N11, 349, 583, 186, 313.40) excluding other cost in other currencies which include $592, 976, 050.00 dollar, 4, 877, 068.47 Euros and 3, 455, 656.93 Pounds, on renovation of refineries, yet they are unproductive,” he said.
In a graphic details that elicited anger and disappointment, the lawmaker said:
“Despite the moribund state of the four refineries, the operating costs of these refineries between 2010 and 2020 is estimated at N4.8 trillion Naira. The refineries are estimated to make a cumulative loss of N1.64 trillion, within four years.
“Concerned that the Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven (7) years from 2013-2019 at an estimated cost of N12,161,237,811.61 only, in addition, on the 18th March 2021, a rehabilitation contract was executed between NNPC/PHRC and Tenenimont SPA at a Lump Sum of $1,397,000,000.00 only, about N75 billion naira amidst global public criticism.
“Phase 1 of the Project is expected to be completed in 28 Months after the contract, Phase 2 within 24 months and Phase 3 within 44 months of execution. Despite this, the Port Harcourt
“Refinery remains a money pit. Going by projections and representations from NNPCL the renovation works ought to be completed and operations of the Refinery commenced by June 2023.
“Perturbed that in a bid to revitalize the Warri Refinery, the Federal Government has injected huge Public funds into revamping Warri Refinery & Petrochemical Company limited to the tune of over N28, 219, 110, 067.10 between 2014 and 2019.”
The Senate, consequently, constituted the 7-member ad-hoc committee to investigate the matter and to submit their findings to the upper legislative chamber within four weeks – November 21, 2023.
Disappointment, Rage
Stakeholders and industry experts have expressed disappointment over the Senate’s latest outing in legislative frivolities called probe. An oil and gas business practitioner, Engr Canice Benjamin, advised the upper legislative chamber to settle down and enjoy their new SUVs cars gifted by the Federal Government instead of embarking on a “public, dance of shame”.
Engr Benjamin recalled that the Senate had engaged in countless probes of the oil and gas industry as well as the Nigerian National Petroleum Company Limited (NNPCL) without producing any concrete result that can be identified as problem-solving.
Mr Rufai Oseni, a presenter on the Arise Television News ‘The Morning Show’, described the exercise as one that will end the way of the notorious Senate probes of the Niger Delta Development Commission (NDDC).
Basket of probes
The Senate in May 2020 set up a seven-member ad-hoc committee to probe the “financial recklessness” of the Interim Management Committee (IMC) of the NDDC.
The committee was specifically asked to probe the IMC for allegedly squandering N40 billion in three months and seek account for other financial transactions within this period.
The acting Managing Director of NNDC, Prof Daniel Pondei, who collapsed in the blare of the television camera while appearing at the Senate in August 2020, was rushed out of the venue of the investigative hearing.
The then Minister of Niger Delta Affairs, Senator Godswill Akpabio, now Senate President, however, stayed behind for the probe, which was eventually suspended after the incident.
Akpabio’s revelation that the lawmakers were part of the financial rot in NDDC stirred controversies that diverted attention from the purpose of the probe. The exercise died a natural death.
In another incident, the Senate on July 11, 2023 constituted an ad-hoc committee to investigate the fuel subsidy regime of the NNPCL. This followed the adoption of a motion by Patrick Chinwuba (Imo) during plenary.
The motion was tagged “Need to Investigate the Controversial Huge Expenditure on Premium Motor Spirit (PMS) under the Subsidy/Under Recovery Regime by the Nigerian National Petroleum Company Limited (NNPCL).”
It said the NNPCL, within the period of subsidy exit attempt, substituted the term subsidy with under recovery without any recourse to the National Assembly or supervision by any other arm of the government.
“While NNPCL within ten years, 2006 and 2015, claimed about N170 billion as under-recovery, the same NNPCL within 13 months, January 2018 to January 2019 claimed a whopping sum of N843.121 billion as under-recovery,” the lawmaker said.
THEWILL also recalls that a probe by the Nigerian Senate into whether the state oil firm, NNPCL, made improper withdrawal was later expanded with the amount under investigation doubling to over $2.2 billion, according to the committee.
The Senate at a time, also, voted to probe withdrawals of $1.05 billion by NNPCL, from NLNG, a venture owned by the state oil firm and foreign energy companies, without approval.
The committee led by Senator Bassey Akpan, chairman of the Senate committee on gas, said it had found more withdrawals in excess of what it set out to investigate.
Akpan asked NNPCL and central bank officials to provide documents to back up the withdrawals carried out at various periods between 2016 and 2018. The probe ended the way it was started.
THEWILL further recalls that the Senate in December 2016, commenced a probe of the NNPCL for not remitting $5.4 billion proceeds from the sale of oil leases and crude in question. The committee on finance was asked to submit its probe report in January2017, which did not happen.
During the Buhari-led government, the Senate in 2016 moved a motion to “thoroughly investigate” the allegations by the then Minister of State for Petroleum Resources, Dr Ibe Kachikwu, against the NNPCL Group Managing Director, Dr Maikanti Baru, on the wrongful awards of the $25 billion contracts and new appointments in the national oil company, adding that “Nigerians will be waiting to hear the outcome of these sensitive investigations”. The probe was never executed.
There is the perception among Nigerians that perhaps, the committees’ findings or reports were compromised and hidden from public knowledge by the leadership of the Senate, or that the probes were never carried out.
Way out
Alluding to a way out of the frivolous probes by the Senate, principal consultant at Lonadek Services and consultant for the Vision 2020 initiative, Ibilola Amao, said the refineries should be privatised and the government detach itself from the oil and gas business.
“Government has no business in business. The supposed privatised NNPCL in its current state with the government interference does not have the ability to run a lean and profitable refining business,” the Nigerian and London engineer told THEWILL in a note.
A top NNPCL official told THEWILL on point of anonymity that NNPCL remains the cesspit of corruption and a conduit pipe for extensive national revenue loss.
“NNPCL is reputed as a behemoth of corruption and a low hanging fruit for the leadership to enrich themselves. What the Senate is doing is to have their own share of the national cake because all eyes are on oil”, the official said.
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