E dey very difficult to send crude oil to di refineries becos vandals don completely scata di pipelines. For many years hoodlums bin de yenta inside bushes and forests wia pipelines run through for different parts of di kontri to destroy den steal crude and refined oil.
This no be di first time wey goment dey do throw moni to rehabilitate di PH refinery. None of di refineries don get any serious maintenance service since , di last turnaround maintenance happun for For di Nigeria National Petroleum Corporation announce say dem don begin first stage of rehabilitation of di PH refinery.
Dis work wey suppose be major turnaround bin dey come 19 years afta di last turnaround. Although di Nigerian goment don dey struggle for many years to make di refineries operate for maximum capacity once again, dem neva fit achieve am. But one private Nigerian business man Aliko Dangote nearly complete Africa biggest private refinery for Lagos inside four years.
Wen e begin function, di expectation be say di refinery go produce , barresl per day of petrochemical products. Wetin we call dis foto, Port Harcourt Refinery na Nigeria oldest. Wetin we call dis foto, Flow station.
Port Harcourt Refinery no dey make moni. Nigeria bin plan to sell Port Harcourt Refinery to fund budget. Vandalise pipeline. In April , they were all shut pending rehabilitation. Nigeria has struggled with the poorly maintained units for decades. Successive NNPC chiefs and politicians have announced a series of unsuccessful plans to revamp, privatise or expand the refineries.
NNPC abandoned a similar attempt in to partner with oil traders, producers and engineering firms to fund refinery revamps after more than a year of talks, saying it would fund the projects itself. Shortly after independence, the Shell-BP Petroleum Development Company saw an opportunity to meet the product needs of the country. It embarked on a project to build the first refinery in the country near Port Harcourt.
The 38, barrels per day bpsd Shell-BP Refinery was completed and commissioned in It was a simple hydro-skimming plant. The capacity was increased to 60, bpsd. The plant met all the normal petroleum product needs of the country except for bitumen which was still imported. The refinery was a fully private company and sold its products directly to the marketing companies in Nigeria under an arrangement in which they paid for stated capacities of crude supplied, lifted products realizable from those capacities, and paid the refinery a processing fee accordingly.
It was a very efficient and profitable arrangement for all parties involved. The Federal Government earned tax revenue and excise duty. It was thereafter fully Nigerianised and came under Government control. It may be necessary to state that the geopolitics of oil influenced several decisions made in the early years of the industry in Nigeria.
Danielsen ; Sonny Atumah , Vanguard Publications. OPEC was founded in to coordinate the petroleum policies of its members and to provide member states with technical and economic aid.
As a grouping of petroleum exporting countries, it could be argued that a major objective was to wrest control of pricing of crude oil from the IOCs, and increase the take by the host country Governments. To a large extent, they have succeeded.
Its reserves make Nigeria, the tenth most petroleum-rich nation and, by far, the most affluent in Africa. Nigeria has a total of oil fields and wells in operation, according to The Ministry of Petroleum Resources. Nigeria is the largest producer of sweet oil in OPEC. The sweet oil is similar in composition to the petroleum extracted from the North Sea. By the late s and early s, Nigeria had attained a production level of over two million barrels of crude oil per day [ 1 ].
This oil wealth and their large population gave Nigeria a voice. By the mids, projections by the economic surveillance unit of the NNOC indicated that at the rate the economy was growing, demand for petroleum products would outstrip production by NPRC. The Warri Refinery Project was completed in December , and commissioned early in Again all the petroleum product needs of the country were being fully met from both existing refineries. Economic activity was growing in the northern as well as in the southern parts of the country.
Products were being delivered by long haul trucks to the North as well as rail. Kano and Kaduna were experiencing rapid growth, as well as sections of the middle Belt. Projections again indicated that by the mids, demand would outstrip the production capacity of the two existing refineries. It was, therefore, decided to build a third refinery and locate same in Kaduna closer to the high demand areas in the North.
The Kaduna Refinery was completed and commissioned in Waxy crude required as feedstock for the Lubes Plant was imported from Saudi Arabia and Venezuela as all Nigerian crudes were napthenic [ 7 ].
They were allowed to operate under governance by a Board appointed by Government with professionals and a representative from the Ministry of Finance Incorporated MOFI. MOFI was the investment arm of the government, and hence had an eye for profitability and efficiency. The Minister of Petroleum was the Chairman of the Board. Thus, the corporation was allowed autonomy to run its affairs, maintain assets and run these government investments to a large degree without political interference, except to obtain approvals as needed from time to time from the Minister of Petroleum.
The Petroleum Act gave the Minister the necessary authority to exercise these powers. Under this arrangement, capacity utilization by the Refineries was same as existed elsewhere in the world, maintenance was carried out in a timely fashion, and all operating and maintenance costs and expenses including staff salaries and benefits were met without recourse to the Federation account. The refineries paid dividends and profits to the Government. Projections in again indicated that based on the pace of economic activity, a deficit of supply would develop by Thus, the New Refinery Project was conceived.
NNPC intended to go into export of petroleum products. Hence, two refineries were planned; a , bpsd in Port Harcourt and another , bpsd plant to be sited in Calabar where there was a deep sea draught. The second plant was to be solely for export. The two projects were commenced at the same time.
Unfortunately, at that stage, Government decided that only one , bpsd refinery should be built in Port Harcourt. The refinery was completed and commissioned by NNPC in at design capacity. After satisfying all local demands, extra products were exported efficiently. Design capacities for the three refineries are stated in Table 1. The decline in the performance of the local refineries started in the early s after the military Government ordered NNPC to close its accounts in commercial banks and transfer them to the Central Bank.
NNPC lost its autonomy. It became increasingly subjected to interference and directives by politicians. It could no longer ensure prompt maintenance of the refineries. Most importantly, decisions on when to carry out turnaround maintenance and which contractor to execute it came under the influence of the Government rather than by the professionals within the corporation. Things very quickly went downhill thereafter as a result.
Whereas Fig. The construction of this refinery was completed in The first year operation covered only about 7 months. The decline from onwards is evident. The sorry situation of low capacity utilization which developed and still exists today is due to the following reasons:.
No major turnaround maintenance has been carried out in any of these refineries since This should be viewed against the established best practice worldwide that TAM should be conducted by refineries every two or maximum 3 years.
Pipelines supplying crude oil to the refineries, and those conveying products from them are routinely vandalized. This leads to massive loss of revenue and worsens the problem of under-recovery of crude cost. Even if the refineries were able to operate consistently, the price of Premium Motor Spirit PMS is regulated by Government, leading to serious under-recovery of crude cost. The problem of poor governance has been recognized as a key factor that has affected the performance of the refineries.
All requests for funds to carry out maintenance are subject to multilayer bureaucratic processes. Approvals for any meaningful maintenance are subjected to considerations first by the refinery management committee, thereafter by the corporate refineries directorate, then by the corporate management committee, followed by the corporate board and finally by the National Federal Executive Committee chaired by the President of the Nation, depending on the amounts required.
These processes often require months to go through the various stages. Refineries cannot run reliably in this manner. Outright commercialization or outright divestment of significant equity has been promoted as a solution to this malaise. The Petroleum Industry Bill which was first presented to the National Assembly in was intended to introduce better governance along these lines.
Unfortunately, the bill has been considered by successive assemblies, but is yet to be passed nor signed into law.
Typically, a petroleum refinery is a complex manufacturing plant designed to convert crude oil feedstock into a definite number and types of petroleum products. The types of products fall into two major categories, namely fuel products and lubricating products.
Best practice is that a Refinery is designed and built to produce defined quantities and specifications quality of each of these products operating in a continuous manner without interruption for 24—36 months based on proper maintenance culture, before it is systematically shut down for a period, to carry out Turn around maintenance TAM.
When TAM is unduly delayed, performance of the refinery declines. A more serious consequence is that the country is forced to resort to importation of petroleum products, and massive waste of scarce foreign exchange.
Due to non-performance of TAM, and epileptic supply of crude oil feedstock, actual capacity utilization was much lower. See Table 3 and Fig. This deterioration requires to be duly taken care of by various maintenance interventions, techniques and at certain pre-determined intervals so that the required use of facilities can be continued and service life extended until the point where maintenance costs become prohibitive and replacement action becomes inevitable.
Our own car periodic service maintenance is an example. The American Petroleum Institute API defines Turnaround as a periodic shutdown total or partial of a refinery process unit or plant to perform maintenance, overhaul and repair operations and to inspect, test and replace process materials and equipment. Turnarounds are critical for the health of a refinery and are the single most costly part of a plant or process plants maintenance budget.
The maps that follow indicate the location of the refineries in Nigeria, and the network of pipelines constructed by NNPC for supply of crude oil to the refineries and for evacuation of products Figs. As is evident from the two maps above, the refineries were designed to receive crude oil feedstock by pipeline. In like fashion, they were designed to have products evacuated mainly also by pipeline.
Lifting of products from depots immediately contiguous to the refineries was intended mainly to supply the towns and cities nearby. The network of pipelines for evacuation of products is shown in Fig. Vandalization of crude and product pipelines commenced in the late s. Some scholarly works have sought to elucidate the reasons for this development. Two major reasons have been attributed:.
The agitation for resource control and the attendant rise of militancy in the Niger Delta region.
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