NNPC to borrow $500m to fix ailing refineries

The Nigerian National Petroleum Corporation, NNPC, has stated that it has finalised plans to get external funds of $500 million to bring the nation’s ailing refineries back on course to give the required capacity output.

This was disclosed yesterday by the Group Managing Director, GMD, of the Corporation, Dr Ibe Kachikwu, while speaking as a guest speaker at a luncheon organised by The Petroleum Club Lagos.

The NNPC chief said the decision to seek fund to be repaid over the next seven to nine years is in line with the transformation of the NNPC to become an autonomous business venture.

He reiterated his commitment to making NNPC a profitable company, and to accomplish this target, he has adopted some measures including the unbundling of the corporation, cancellation of offshore processing agreement, OPA, crude swap and other unprofitable business models.

The Minister-designate said the two of the refineries would be shut down for eight to nine months for quick repairs, while the remaining, which are better in shape would be used to supplement imports. They would be shut down after the other two are back on stream.

He maintained that to turn NNPC from its current loss to profit position, next year will be the most challenging in the transition and transformation programme of NNPC and the oil industry.

“From 2016, we (NNPC) will have a budget and work within the budget. There will be no arbitrary deductions from the corporation’s revenues because it belongs to the government. Other important projects and activities not covered by the budget, the corporation will seek external funds like any other company, which it will repay. We have made our books open and transparent. Our accounts will be audited, and financial organizations that lend would be able to know the state of the company and basis for which they will lend,” he stated.

The NNPC chief also said the Pipeline and Product Marketing Company, PPMC, an arm of the Corporation, is his worst headache. According to him, 85 per cent of NNPC losses come from PPMC because of vandalism, community issues and connivance of some of the staff with the perpetrators of the crime.

To check the development, Kachikwu said he has moved the depot managers in PPMC and has stopped pumping of products in the night. He then disclosed that products are now pumped during the day.