Federal government has approved contracts for the rehabilitation of Warri and Kaduna refineries at combined sum of $1.484 billion.
This was made known by the Minister of State for Petroleum, Mr Timipre Sylva, who spoke to State House correspondents after the Federal Executive Council meeting presided over by vice president Yemi Osinbajo at Presidential Villa on Wednesday.
The breakdown according to Mr Sylva shows that $897,678,800 million was set aside for Warri refinery while $586,902,256 million was for Kaduna refinery.
The Minister said the Council also approved acquisition of 20 percent minority stake by the NNPC in Dangote Petroleum and Petrochemical Refinery in the sum of $2.76 billion.
Rehabilitation of the refineries will be carried out in three phases.
“The first phase will be completed within 21 months, in 23 months phase two will be completed and in 33 months, the full rehabilitation will be completed,” the Minister stated.
He also said work has already commenced in the Port Harcourt refinery, adding that the first 15% of the contract sum has been paid to the contractor and the contract was fully mobilised to the site.
The Managing Director, Nigerian National Petroleum Corporation, NNPC, Mr Mele Kyari, had in June said that rehabilitation of the refineries, in conjunction with private efforts such as the Dangote Refinery, will transform Nigeria into a “hub of petroleum products and supply.”
There are five refineries in Nigeria of which four plants are owned by the Nigerian Government through NNPC which include two in Port Harcourt. But all have not been functioning optimally, making the country rely heavily on importation of petroleum products, leading to government huge spending on subsidizing cost for Nigerians, which has impacted negatively on the economy.
The rehabilitation contract which was awarded to Saipem SPA and Saipem Contracting Limited, an Italian multinational oilfield services company, is expected to turn around the refineries and make them meet national oil demands.
The successful completion of the rehabilitation project can also have a positive impact on the pump price of petroleum products.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.