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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