By Emmanuel Gandu
EXCERPTS
Nigeria’s three refineries of Port Harcourt, Warri, and Kaduna have a combined refining capacity of 445,000 barrels per day but non of them is functional for decades despite series of Turn Around Maintenance (TAM).
The Buhari APC government had since coming to power in 2015 spent a whopping $26.5 billion on maintenance of refineries alone. Oil experts and industry watchers had estimated that it would cost less than ($ 24 billion) to build new and same 3 refineries with same refining capacity at Port Harcourt, Warri, and Kaduna today. They wondered why this government is not prudent with scarce resources by going ahead to do turn around maintenance with funds that could have built a new set of refineries.
IN THE BEGINNING
The discovery of Oil (Black Gold) in January 1956 at Oloibiri in Ogbia LGA of Bayelsa state, and subsequently many others in several Communities in the Niger Delta of Nigeria was seen as God’s blessings to the country.
Following the discovery of more oil wells Nigeria embarked on the construction of refineries by the GEN. YAKUBU GOWON led administration:
1. Port Harcourt refinery commissioned in 1965 with a refining capacity of 210, 000 barrels per day of oil and gas.
2. Warri refinery commissioned in 1978, and the commissioning of the Petro Chemical plant in 1987 with a total refining capacity of 125, 000 barrels per day.
3. Kaduna refinery commissioned in 1988 with a total refining capacity of 110, 000 barrels per day for oil and gas. It was also built to produce lubricating oil blend stocks, waxes, bitumen and Kero.
These refineries launched Nigeria to the elite club of world oil producing nations, and the organization of Oil Producing and Exporting Countries (OPEC).
Without any hesitation, one can boldly say that the discovery of oil in any country is a great achievement for development. However, one may be tempted to ask a rhetorical question – Is the discovery of oil a curse or blessing to the people of the Niger Delta?
BLOOD AND RUMBLINGS IN THE NIGER DELTA
Petroleum prospecting, exploration, mining, pipeline/transportation, and refining activities come with consequences. Some of the consequences include environmental degradation and pollution which affects farming activities, aquatic life, availability of portable water, sooth emission, and many other ailments.
The Niger Delta that lays the golden egg have been at the receiving end without much to smile home with. The struggle against the environmental degradation of the Niger Delta led many to pay the supreme prize.
KEN SARO WIWA
Killed with 8 others by the General Sani Abacha Military Junta, Ken Saro Wiwa was a Nigerian environmental activist, writer, television producer, and a fighter for the rights of the Ogoni people of the oil rich Niger Delta.
He led a non – violent campaign against the environmental degradation of the land and waters of the Niger Delta especially in Ogoni land by the operations of the multinational petroleum industry especially the Royal Dutch Shell Company. Wiwa criticized the Nigerian government for its reluctance to enforce environmental regulations and standards on these foreign companies.
Ken Saro Wiwa and his colleagues (the Ogoni 9) to form the Movement for the Survival of the Ogoni People (MOSOP) through which they agitated for a better Niger Delta.
GENERAL SANI ABACHA
Ken Saro Wiwa and colleagues (Ogoni 9) were sentenced to death by hanging through the Civil Disturbances Special Tribunal set up set up by the Sani Abacha Military Junta. They were killed on the orders of General Sani Abacha in Port Harcourt on 10th November 1995. Ken Saro Wiwa’s execution provoked international outrage resulting to Nigeria’s suspension from the Commonwealth of Nations for over three years.
NIGER MILITANT GROUPS
The aftermath of Ken Saro Wiwa’s execution led to more arms struggle for clean environment and resource control by the militant groups, some of who include:
(1) Marine Commando – led by Adaka Boro
(2) Movement for the Survival of the Ogoni People (MOSOP) led by Ken Saro Wiwa.
(3) Niger Delta People’s Volunteer Force (NDPVF) led by Asari-Dokubo.
(4) Niger Delta Vigilantes (NDV) led by Ateke Tom.
(5) Movement for the Emancipation of the Niger Delta (MEND) led by Tompolo.
(6) Niger Delta Avengers (NDA).
(7) Niger Greenland Justice Mandate.
(8) Red Egbesu Water Lions.
(9) Continuous Emancipation of Niger Delta (CEND)
PRESIDENT OLUSEGUN OBASANJO
Militancy and armed struggle had continued to keep strained relationship between the government and the Niger Delta people.
It was not until:
(1) The year 1999 when President Olusegun Obasanjo set up the Human Rights Violation Investigation Commission otherwise called the Oputa panel when every section of the country and individual was given the opportunity to complain of the wrongs suffered in the hands of any group or persons. This commission investigated human rights violation during the period of military rule, reconciled and unified communities previously in conflict. The commission was chaired by Justice Chukwudifu Oputa, with Rev. Fr. Matthew Hassan Kukah as Secretary.
(2) The year 2000 when President Olusegun Obasanjo established the Niger Delta Development Commission (NDDC) with the sole mandate of developing the oil rich Niger Delta region through the percentage of oil sales proceeds allocated to the region through this Commission. This action brought some respite in the activities of the militants of Ijaw, Ogoni, and other nationalities of the Niger Delta.
PRESIDENT UMARU MUSA YAR’ADUA
During this period, the agitation and militancy though reduced to some level, armed struggle, kidnapping of oil workers, and vandalisation of oil pipelines continued to disrupt oil production and supply as the various groups kept demanding for self rule and resource control.
Umaru Yar’Adua’s Presidential Amnesty Program (PAP) introduced in June 2009 unconditionally for the Niger Delta region led to a drastic reduction in pipeline vandalism, disruption of oil production, and kidnapping of oil workers. Interestingly, this Amnesty Program brought about increased petroleum production. As a result, Nigeria witnessed increased production from 700,000 thousand barrels per day in mid 2009 to between 2.2 and 2.4 million barrels per day from 2011.
THE MUHAMMADU BUHARI FACTOR
He supposedly remains the most experienced among Nigeria’s leaders in the petroleum industry but instead of being an asset and a stabilizing factor, Buhari ended up a liability in the Nigerian Petroleum sector:
(1) Col. Muhammadu Buhari as the Petroleum minister of Nigeria in the Olusegun Obasanjo’s Military government in a Daily Times Newspaper headline of 7th June 1977 assured Nigerians that “Fuel crisis may be over next year.” 46 years after that assurance, Muhammadu Buhari as president of Nigeria and doubling as Petroleum minister up to May 2023, the story is worst than in 1977.
(2) Muhammadu Buhari was Military Head of State from December 1983 – 1985
(3) Major General Sani Abacha as military Head of State appointed Muhammadu Buhari in charge of the Petroleum Trust Fund as its chairman.
(4) Muhammadu Buhari personally led a nation-wide street protest against fuel price increase to #65 per litre by the government of Good Luck Ebele Jonathan.
(5) From 2015 – 2023 President Muhammadu Buhari doubled as the petroleum minister, and yet the scarcity of the product not only became a nightmare for Nigerians, but also a source of large-scale corruption and scam in a magnitude never witnessed in Nigeria.
(6) During Muhammadu Buhari’s watch (2015 – 2023):
(a) He abandoned the Yar’Adua’s Amnesty Program for the Niger Delta youths/militants. This action encouraged the resumption of oil production disruption, pipeline vandalisation, and oil theft.
(b) Nigeria’s petroleum consumption relied on ? importation, thus making a litre to sell for between #300 to #600, with acute shortages across the country.
(7) As a consequence of 6 above, the financial squeeze forced Muhammadu Buhari government to resort to massive foreign borrowing through out his tenure of 8 years.
(8) Muhammadu Buhari’s tenure ended in May 2023 leaving behind not less than #77 trillion debt for the next government and generations to inherit.
OIL SUBSIDY: FACTS OF THE SCAM
Nigeria is the 7th highest oil producer in the world, and Africa’s biggest.
Despite oil being the country’s economic mainstay since the 1970’s, contemporary successive governments have failed to maintain the refining of crude oil in our refineries. These seeming apathy had resulted in the abandoning of such critical assets leading to endless importation, rising prices of premium spirit, diesel, gas, jet A (Aviation) fuel, bitumen, kero, etc.
Nigeria is a country that produces crude oil, but imports refined products for domestic consumption. This no doubt has given rise to monumental corruption.
√ How much crude oil is produced?
√ How much crude oil is stolen?
√ How much crude is exported?
√ How much Crude is imported?
√ How much litres is consumed?
These are some of the questions NNPC and government is unable to provide answers to. Funds are always released for Turn Around Maintenance (TAM) of the countries three (3) refineries at Port Harcourt, Warri, and Kaduna but the more money is sunk, the less of oil drop is seen by Nigerians.
These refineries have become more of cash cows for government officials than avenues for national development. For a government of the APC that promises to build of 4 new refineries in 4 years to resort to spending a whopping $26.5 billion on endless maintenance of rusted infrastructure called refineries smacks of corruption.
Therefore, Petroleum products have continued to be subsidised. Unfortunately, due to the rising price of crude oil in the international market, and the falling value of the naira, Petroleum subsidy payment grew from # 350 billion in 2019 to # 450 billion in 2020, then got to # 1.573 billion in 2022.
What baffles keen observers of the sharp rising trend of this subsidy regime is the figures spent for 2022. Data from the Nigerian National Petroleum Corporation (NNPC) showed that for January and February 2022 alone, the cost for subsidy was # 396.72 billion. Furthermore, the federal legislatures approved another sum of #4 trillion to be spent on subsidy in 2022.
These #4 trillion approvals to be spent for subsidy in 2022 meant that the federal government had abandoned its enacted Petroleum Industry Act of 2021 that prescribed a free market for the downstream sector of the petroleum industry.
According to the minister of Finance, Budget & National Planning, Zainab Ahmed in July 2022, the country was expected to pay as much as #6.72 trillion for subsidy in 2023. This is the danger:
(1) This portends trouble economically as this subsidy regime continued.
(2) How will Nigeria with a total annual budget of #17 trillion naira use a whopping #4 trillion for subsidy alone?
(3) How will Nigeria cope with a projected revenue of #10 trillion?
(4) Oil prices were surging upwards globally due to the Russian War in Ukraine. Nigeria was unable to take advantage of this global oil boom in price because we don’t refine. Surely the subsidy had to get higher as Nigeria was at the mercy of rising market forces. Surely, things got much more difficult for Nigeria as we entered 2023.
PETROLEUM CORRUPTION SCANDALS UNDER APC / BUHARI’S WATCH
You would recall that APC under Buhari had promised Nigerians before the 2015 elections that they will build 4 new refineries in 4 years of their reign if elected to power. The APC was elected in 2015 and we are 9 years going without APC government building any new refinery. They cannot even maintain the existing ones, thus subjecting Nigerians to excruciating agony of high prices and shortages. As we speak, Nigeria cannot even mine its crude for export to meet the approved 1.8 billion barrels per day OPEC quata.
Surprisingly, Major General Muhammadu Buhari was the petroleum minister during the military administration of General Olushegun Matthew Aremu Obasanjo. Again from 2015 to 2023 President Muhammadu Buhari doubled as the Minister of Petroleum. Therefore, the alleged monumental corruption in the oil sector from 2015 to 2023 can rightly be placed at Buhari’s doorstep.
The APC government under Buhari’s watch reportedly spent #10.23 billion in June 2020 on three (3) refineries that ended up processing zero crude. Again in 2021, this APC government approved and spent $1.5 billion (about #600 billion) to repair the Port Harcourt refinery. Despite the huge spending, the refineries had refused to function, while Nigerians kept groaning under the excruciating and persistent scarcity.
Interestingly, SERAP in a suit number FHC/L/CS/806/2022 filed in the Federal High Court, Lagos was seeking an order of Mandamus to compel Muhammadu Buhari to investigate the spending of #1.48 trillion reportedly spent on 4 refineries between 2015 and 2020 (NNPC Monthly Financial Statement).
MORE SCANDALOUS REVELATION
In another major revelation twist, petroleum industry watchers lamented the whopping sum of $26.5 billion which the federal government had so far spent on the maintenance of the country’s loss – making 445,000 barrels per day capacity three (3) refineries of Port Harcourt, Warri, and Kaduna.
Experts on energy and construction of refineries had opined openly to say that this $26.5 billion was capable of building three new refineries of the same sizes as each of the ones in Port Harcourt, Warri, and Kaduna. This suggestion, according to these experts was arrived at based on the cost analysis of refinery projects currently going on across the world:
(1) The Ecuador refinery being constructed at Manto is a 500,000 barrels per day capacity for $12 billion.
(2) Dangote refinery in Lagos Nigeria, a 650,000 barrels per day capacity being constructed for about $15 billion.
(3) Kuwait is building the Al Zour Oil Refinery for $16 billion with a refiningcapacity for 615 barrels per day.
Now, with Nigeria’s three (3) refineries having a combined refining capacity of 445,000 barrels per day, the implication is that it would cost less than:
(a) $8 billion to build a new 210,000 barrels per day capacity refinery in Port Harcourt – the same size like the existing one.
(b) It will also cost less than $8 billion to build a new refinery in Warri, just like the existing one with same refining capacity of 125,000 barrels per day.
(c) The Kaduna refinery has a refining capacity of 110,000 barrels per day.
If an exact and similar refinery were to be built today in Kaduna, it will cost less than $8 billion.
By the above experts analysis, the three new refineries would therefore cost only about $24 billion.
The questions to ask the APC and the out gone Muhammadu Buhari government include the following:
(1) Why did the government of APC spent a whopping sum $26.5 billion on maintenance of refineries without a single drop of oil?
(2) Did Buhari’s Petroleum Minister experience during the Obasanjo military rule and his doubling as Petroleum Minister status from 2015 to 2023 went without managerial capabilities?
(3) Who will account for these monumental wastages to Nigerians?
(4) What will APC boast to have achieved in its 8 years of governance of a Nigeria with 200 million suffering people?
(5) How are Nigerians going to survive a subsidy removal regime where petrol sells for #800.00 per litre pump price.
(6) How can the Tinubu government justify the hardship in a Nigeria that is the world’s 7th oil producer?
(7) Should Nigerians hold Tinubu to account for the sins of Buhari or crucify him for the subsidy removal?
(8) Is subsidy removal a curse or a blessing?
“Let the poor Nigerians breath”
