Senate probes concession of Port Harcourt refinery to Agip, Oando plc
…Asks petroleum ministry to suspend all transactions
The Senate Tuesday resolved to investigate the planned concession of the Port Harcourt Refinery to Agip and Oando plc by the Ministry of Petroleum Resources.
The upper chamber also asked the Ministry of Petroleum Resources to stop all processes and transactions regarding the concession pending the conclusion and submission of the report of its ad-hoc committee set up to probe the deal.
The resolution followed the adoption of a motion entitled “Non transparent transaction relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources,” sponsored by Senator Sabo Mohammed (Jigawa South).
Mohammed in his lead debate expressed worry about alleged non-transparent transactions of the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources.
The lawmaker said that he is aware that the Federal Government recently entered into an agreement with Nigerian Agip oil company, a subsidiary of ENI, an Italian oil giant to construct a $15 billion refinery in the Niger Delta region, a deal which also includes investment by Agip in a power plant with the Italian company assisting Nigeria in repairs of the Port Harcourt Refinery.
The Minister of State for Petroleum Resources, Ibe Kachukwu, he said informed that the agreement was part of a broader Federal Government plan to increase capacity for local production and consumption of petroleum products with the aim of ending fuel importation in the country by 2019.
He noted that while the resolve by the Federal Government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the latter.
Mohammed said that he is concerned that it is not yet clear if the new arrangement is a concession agreement or an agreement to build a new refinery.
He noted that the confusion became obvious following the disclosure on May 11, 2017 by the Chief Executive Officer of Oando plc on the floor of the Nigeria Stock Exchange that the group had received approval of the Federal Government to repair, operate and maintain the Port Harcourt Refinery with their partner Agip.
He said that the development would have been wonderful because it would mean an end to importation of refined products by the year 2020, “but many questions are begging for answers, such as it it Agip/ENI or Oando plc that is taking over Port Harcourt Refinery?
The lawmaker also wanted to know whether there was observance of the privatization law as regards due diligence, selection from preferred bidders before ceding the Port Harcourt Refinery to Agip/Oando.
Mohammed said that the Senate should be concerned that the planned concession of the Port Harcourt Refinery to Agip/ ENI in partnership with Oando plc without recourse to due process is illegal and a clear attempt at ridiculing Nigerians and would definitely create a big hole that would be hard to fill in the anti-corruption crusade of the present administration.
He said that he is aware that in such transaction, “the best practice is to select partners through open and competitive bids.
He insisted that any exclusive arrangement that does not follow due process, one hatched in the dark without the knowledge and participation of relevant stakeholders tend to lead to sub-optional outcome for the seller, in this case the Federal Government.
He lamented that major stakeholders such as BPE that was empowered by law to conduct such exercise and labour unions are not aware of the deal that is supposed to be signed officially in July this year.
He said that the Senate should be concerned that since Agip has no technical record/history in the Port Harcourt Refinery that was built by a Japanese firm, “one would have expected the concerned authority to look at the Warri Refinery that was built by Agip where they have technical record.
Mohammed said that he is saddened that on assumption of office as the Group Managing Director of the NNPC, Kachukwu declared that by the end of 2015, the Port Harcourt, Warrit and Kaduna refineries would be working a 90 per cent capacity, thus reducing importation and the subsidy controversies.
He said that it is sad that “up till now in 2017, the refineries are yet to be fixed and cannot even produce at 50 per cent not to mention 90 per cent.”
Some senators who spoke warned that the Port Harcourt refinery must not be allowed to go the way of Power Holding Company of Nigeria (PHCN) and other privatized organizations in the country.
Senate President, Abubakar Bukola Saraki, raised a seven-man team to investigate the planned concession.
Senator Abubakar Kyari (Borno North) is named chairman of committee. Other members of the committee included Mathew Urhoghide, Duro Faseye, Benjamin Uwajumogu, Sabo Mohammed, Dino Melaye, Aliyu Wamakko.
The post Senate probes concession of Port Harcourt refinery to Agip, Oando plc appeared first on The Nation Nigeria.