A retired top manager of the Nigerian National Petroleum Corporation
(NNPC), Barrister Paul Ajetunmobi, has explained why the nation’s
refineries are in sorry state.
Ajetunmobi, a former Human
Resources Manager of Warri Refinery and Petrochemical Company, said the
only way forward was for the government to contract the refineries to
experienced hands.
According to him, by the Petroleum Act of 1977
that set up the NNPC, there were legal issues that were yet to be fully
resolved, which were giving the corporation some of its current
challenges.
The
NNPC, he noted, was seen as a public service establishment guided by
public service rules,” which he said “means, for instance, that it
cannot just go to the bank to borrow money to do things like other
companies, whereas in the oil industry, money plays very critical
roles.”
He told The Nation, “I spent the last ten and a half years
of my service at the NNPC in the refineries. The head of refinery has
an authority limit.
“The limit at the time was about N5 million,
which is less than $30,000 by today’s exchange rate, while there are
equipment within the refinery worth about $500,000 or even one million
dollars.
“But by the authority limit of the managing director, he
cannot approve more than $30,000. So he has to approach the corporate
headquarters.
“But
you would find that even at the corporate headquarters, the authority
limit of the Group Managing Director is just about N50 million, which is
not more than $250,000.
“A refinery is a multi-billion dollar
project. For instance, if a compressor has a problem and you want to fix
it, you will need about $150,000. But because of the challenge of the
authority limit of the MD of the refinery, he has to apply to the
corporate headquarters of the NNPC.
“And when he gets to the
corporate headquarters, even the GMD cannot approve it. He has to take
it to the Presidency for approval.
“In the end, something you need
to fix within a week or two would be there for two or three years. And
you know the refinery is an industry that has to work 24/7.
“Once a
refinery starts working, it works non-stop day and night, unless there
is a problem. So, you can imagine metals hitting one another sometimes
up to a temperature of about 300 degrees or 500 degrees centigrade, and
when they break down, you have to wait for approval to repair or replace
them. That is why we have the challenge of not having regular
turnaround maintenance in NNPC.
“Refineries work non-stop for one
or two years. So, by the statutes, turnaround maintenance is supposed to
be done every two years.
“But you have a situation where there
will not be turnaround maintenance for five, seven or ten years. The
machines are bound to break down.
“Contracts for materials like
the caustic soda or the acid they use in refining crude oil are given to
people who have no knowledge of the industry because of the Nigerian
factor.
“The corruption in the system is really impacting
negatively on the refineries, but the staff and management of the NNPC
are being blamed for it,” he said.
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