The operational capacity of the newly rehabilitated Port Harcourt Refining Company came under intense scrutiny on Thursday.
This was following claims that petroleum products loaded from the facility on Tuesday were not newly refined but products stored in the storage tank of the facility in the last three years.
This controversy is typical of the refinery, which has been plagued by a history of delays and setbacks, including seven failed deadlines for the commencement of operations at the plant.
In an interview on Thursday, the Secretary of the Alesa community stakeholders, Timothy Mgbere, alleged that the 60,000 barrels per day capacity facility had yet to become fully operational, contrary to the position of the Nigerian National Petroleum Company Limited.
Alesa, one of the 10 major communities in Eleme, Rivers State, is the host community of the Port Harcourt refinery.
Mgbere also alleged that the refinery only loaded six trucks of petroleum products on Tuesday despite the NNPCL stating that 200 trucks would be picked up from the refinery daily.
Mgbere made these revelations during his appearance as a guest on Arise TV, which was monitored by one of our correspondents on Thursday.
Industry experts also dared NNPCL to begin the sale of products to oil marketers if truly the refinery is functional. But the NNPCL spokesperson, Femi Soneye, did not respond to enquiries on the matter.
On Tuesday, the 60,000bpd-capacity Port-Harcourt refinery resumed operations after years of inactivity, drawing initial praise from Nigerians and industry stakeholders.
The NNPC said the newly rehabilitated complex of the old Port Harcourt refinery, which had been revamped and upgraded with modern equipment, is operating at a refining capacity of 70 per cent of its installed capacity.
NNPC added that diesel and Pour Fuel Oil would be the highest output from the refinery, with a daily capacity of 1.5 million litres and 2.1 million litres, respectively.
This is followed by a daily output of Straight-Run Gasoline (Naphtha) blended into 1.4 million litres of Premium Motor Spirit (petrol), 900,000 litres of kerosene, and low-pour fuel oil of 2.1 million litres.
It was stated that about 200 trucks of petrol would be released into the Nigerian market daily.
But speaking during the interview, the secretary described the recent ceremony for the unveiling of the plant as a “party”, stressing that the full units of the old complex are not functional.
He said, ”The Port Harcourt refinery, and by extension, the Port Harcourt depot, happens to be the mainstay of the Alesa community economy. The economic activities emanating from the operations of these depots mean a lot to us as a community people, but as it were, now, I don’t think it’s a cause for celebration yet because what we are having in the media space is different from what we have on the ground.
“I can tell you on authority as a community person, that what happened on Tuesday was just a mere show at the Port Harcourt depot. A mere show in the sense that the Port Harcourt refinery, we call it area five, that is the old refinery, is merely in skeletal operation. When I say skeletal, I mean that some units of the refinery were brought up and are running, but not the entire unit of the old refinery is functional, as we speak.
“I will give them the credit that at least they have started something, but not to say, according to the Head of Corporate Communication, Femi Soneye, like it is in the media that they are already producing 1.4m barrels per day. That’s not the case. That’s not true. I don’t want to use the word lie, but as an agency that is holding the oil industry in trust for Nigerians, they shouldn’t put out information that is not true.”
He argued that “the true picture of what happened on Tuesday is that the NNPC has been under pressure to televise to Nigerians that everything is okay and that the old refinery has started functioning.
“I can tell you that the MD or the CEO of the refinery, was in Port Harcourt since Monday; the other MDs were also in Port Harcourt. The MD of Port Harcourt refinery and those heading the operations department didn’t sleep through the night of Monday to Tuesday because of the whole event they had on Tuesday.
“What is the true picture? The Old Port Harcourt refinery is built with its utilities, different from the new complex. The tank farm that is servicing the Old Port Harcourt refinery has a different loading gantry at the depot.”
Continuing, he said, “The party they had on Tuesday was held at the new loading gantry that is directly connected to the new refinery. And so, how does that work? It is impossible. The feedstock storage facility for the old refinery had some stock, old stock that has been there for over three years.
“And so what they did was to release that stock, and then loaded six trucks and then televised it to Nigerians that it is the production from the old refinery. That’s not true. And so I like Nigerians to know the truth, but they don’t need to believe me, because Nigerians, no matter how you paint the true pictures to them, they get sentimental. They get tribalistic. They want to whip some sentiment and all that the product that was loaded. But let it be on record that it was only six trucks that they used to calibrate the new loading gantry. The product was not a new refined product from the old refinery.”
He also noted that NNPCL only dispatched six trucks on Tuesday, relying solely on the existing stock at the Port Harcourt Refinery.
He further stressed that the refinery is not producing 1.4 million barrels of litres of petrol per day and urged the NNPCL to stop giving out false information to deceive Nigerians.
Continuing, the community leader faulted claims that the refinery was automated.
He said, “As of yesterday (Wednesday), they also loaded. But let me shock you if we are celebrating that the Port Harcourt old refinery is already functioning. How come they loaded only four trucks of product the whole day? I mean, starting from 7 am when work resumed at the depot, it was all only four trucks that were loaded till about 8 pm of Wednesday.
“And they said it’s automated. How can you have a truck under a bay for more than six hours under an automated system? Back in the years when we had a manual loading system, It didn’t take 45 minutes, but under an automated system, it took more than four hours. And then you tell us, it is 70 per cent operational, but you are loading four trucks for a whole day, one truck staying under the loading gantry for more than six to seven hours. Who are they deceiving?”
He further berated the contractor handling the project, tagging it as incompetent.
He said the choice of the contractor remains the first problem that needs to be corrected.
He noted, “You have a situation where the contractor of this project doesn’t have one single piece of equipment on the ground. The company subleased this contract to numerous subcontractors, who in turn subleased this contract to other contractors. I can tell you that to a very large extent, the result that has been achieved so far in this rehabilitation project was done by local contractors.”
Commenting on the issue, industry experts wondered why the NNPCL would want to deceive Nigerians.
An energy expert, Nick Agule, in an interview, emphasised that the NNPCL must improve in transparent communications by releasing details of where Naphtha was procured from and revealing the current state of its distillation points to Nigerians.
He said, “The NNPCL needs to do more with communication in a transparent manner. They have to say the basics. The refinery that the NNPC is running is owned by Nigerians. We are the owners of this asset. They stated that the facility refines with products derived from Naphtha. But they didn’t tell us where they were getting it from.
“There are two scenarios. They could be getting Naphtha from somewhere, including import, in which case it’s a pure blending plant, or it may imply that they have fired on the distillation unit, introduced crude oil and they have produced Naphtha hence the NNPCL have to show us their distillation units.”
On his part, energy expert Bala Zaka questioned the rationale behind the company’s decision to store products without releasing their prices to the public, when fully aware it would come at an extra cost.
He also urged the company to reveal where its feedstock (crude oil) was procured from and the company supplying it.
He said in a telephone interview, “Generally, when a company produces a product regardless of the type or time, whether it is biscuit or toilet rolls. The first thing you do immediately when products come out of production is to send them to the market. You send them out to customers.
There is a concept in accounting called the Just In Time concept, when you apply this, there is no provision for a storage warehouse or depot. You would want to save the cost of storage. That simply means as the products are coming out of production, oil marketers are waiting to evacuate them, which is good for the facility and the industry because you won’t pay for storage.
“So when dealers are waiting for an organization to release their products and state their price and it is the organization that is holding back, then something questionable is there. There is something suspicious because ordinarily, you need to save costs of storage.
“Also, we have Nigerians who are practicing petroleum engineers and last week, we had our Annual General Meeting. I can tell you that there was no mention of the refinery at all. There is no way technicians or engineers who are sure it has been put into order or reached completion would not have hinted to us at the meeting that the refinery would soon come on stream. That is very strange. It is just like having a pregnant woman giving birth without anyone seeing the pregnancy. You can’t hide the progression.
The petroleum engineer added, “Fitting a refinery, trying to test it, and supplying initial feedstock can’t go without being noticed by anyone. How many people saw tankers, rail lines, or pipelines delivering crude to the refinery? If it is from an oil well, which oil wells are within that axis? NNPCL should tell us where it got its feedstock and for how long will the crude oil supply continue. They should also reveal the agreement signed with the crude oil supplying company.”
However, the Independent Petroleum Marketers Association of Nigeria said it finds it hard to believe that everything displayed so far by the refinery was a mirage.
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