Amidst the federal government’s efforts to revamp the three state owned petroleum refineries in the country, former President Olusegung Obasanjo has urged the government to bury the thought, saying the refineries cannot work again.
The former Nigerian leader made the remark during an television interview with ace broadcaster Sony Irabor at the weekend, saying whatever the NNPC in doing to revamp the refineries will end up in futility.
Obasanjo spoke on the heels of recent efforts by the state-controlled Nigerian National Petroleum Company, NNPC Limited to bring back the refinery to work, one of such efforts, the NNPCL disclosed is the ongoing search for technical partners who can operate the refineries.
While rebuffing such plans by the NNPCL, Obasanjo said it would be a waste of time and resources, citing his experience with the state owned refineries.
Recall that Obasanjo, while in office, had sold the refineries to Nigeria’s business mogul Aliko Dangote but his successor, President Umaru Yar’adua reversed the sale.
Dangote has since build his won private refinery costing over $20 billion, according to Forbes magazine.
Obasanjo said state-owned corporations are bill to fail, saying the Public-Private Partnership, PPP is the best model to run key utility bushiness such as the NNPCL.
“One of the lessons that I learnt is that PPP (public-private partnership) works. Look, one project that has not been destroyed by the government in Nigeria is the NLNG (Nigeria Liquefied Natural Gas), where the private sector has 51 per cent, and the Nigerian government has 49 per cent,” he said.
“See what we did with Nigerian railways. See what we did with the national shipping company. See what we are doing now, even with the NNPC. The NNPC has refineries, and I said to people that it will never work. And a man had the audacity to say, ‘Am I a chemical engineer?”
The former Nigerian leader said all his efforts, while in the office as president to make the refinery work failed to yield result, saying at a point he had to invite a top official of Shell to explain to him why the company refused to buy the refineries. 0:00 / 1:01
Obasanjo: “Look, when I was there, I called Shell. I said, ‘Look, please, I beg you, come and take 10 per cent equity and run the refinery for us.’ They said no. I said, ‘Okay, if you don’t want to take equity, don’t take equity. Come and run the refineries. They said no,”
“So, I called him, and I said, ‘Tell me, be honest with me. Why don’t you want to handle this?’ He said first, they want to let me know that they make most of their profits on the upstream, not the downstream.
“He said they run their downstream without making a loss, but they don’t make a lot of profit from it. It’s more of a service than a major profit-making. So that’s number one.
“Number two: he said our refineries are too small. This was when I was an elected President. He said our refineries are too small. One is 60,000 barrels, and another is 100,000 barrels. He said refineries at that time were in the range of 250,000 barrels to 300,000 barrels. Number three: he said our refineries are not well-maintained. We call quacks and amateurs to come and maintain our refineries. The refineries are not in good order. He said, ‘Number four, there’s too much corruption around our refineries, and they don’t want to be part of that,” Obansanjo explained.
The former leader recounted how he convinced Dangote to pay $750 million for the acquisition of 51 percent of two of the refineries, saying it was sad that his successor reversed the deal.
He stated: “Until one day, Aliko (Dangote) came and offered $750m to take two of the refineries; that will be 51 per cent. I said, ‘Wow, God, you are really a God of miracles.’ I told Aliko to bring the money quickly. They brought the money, and they paid.
“When I left office, NNPC went to my successor and convinced him. So I got up. I went to Umar. I said, ‘Look, Umar, maybe you don’t know; this is why we did what we did.’ He said, ‘Well, NNPC came to me.’ I said, ‘But you know that NNPC cannot run this thing. He said he knew. I asked, ‘Then why did you give in? He said because of pressure. And I said, ‘Look, when you sell these refineries, you will not get 200 million (dollars) for them, because you will sell them as scrap.’
Recall that Dangote had in July last year while hosting members of the Global CEO Africa in his office expressed doubt that the refineries will ever work again.
At least, $16 billion has been spent by successive administration in the country to revamp the refineries without results, experts say.
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