FG would resort to holding minority shares after giving up the refineries to investors.
The Federal Government (FG) has disclosed that it is in talks with some investors to give up majority stakes in the government’s 4 refineries.
The disclosure was made by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, during a discussion programme on Channels Television on Wednesday, September 9, 2020.
He revealed that the Federal Government wanted to implement an operating model in which the government-owned NNPC would be a minority shareholder in the assets. He said that the government wanted the LNG model for the refineries, where the private investors would operate and manage the refineries.
The NNPC boss, however, did not specify how the government planned to transfer ownership, or who they hoped to transfer it to.
He also explained that plans were underway to rehabilitate the 4 major refineries to start producing at maximum capacity. This plan is expected to place Nigeria as one of the world’s biggest exporter of petroleum products within the next 3 years.
Kyari further disclosed that the refineries, which have only worked sporadically for years due to severe underinvestment, would need serious repairs and refurbishment as against the routine Turn Around Maintenance (TAM).
It can be recalled that in April, the NNPC said that it had shut down all its 4 refineries to secure funding for their refurbishment, and would no longer manage them when they reopened.
He said that the pipelines which supplied crude oil to these 4 refineries in Kaduna, Warri and Port Harcourt were badly damaged. In the latest financial report that was released by NNPC, these refineries processed almost no crude in 13 months to June this year, even though they had an operating cost of about $367 million.