NECA Calls Out NNPC’s $25 Billion Unpaid Debt, Criticizes New MoU
The Nigeria Employers Consultative Association (NECA) has raised alarms regarding the Nigeria National Petroleum Corporation’s (NNPC) recent signing of a memorandum of understanding (MoU) for the refurbishment of the Port Harcourt and Warri oil refineries. NECA’s position is that praising this new agreement undermines patriotism, especially considering that past refurbishment efforts have resulted in approximately $25 billion in unaccounted expenditures without any meaningful output.
Aliko Dangote Targets Kenya for New Oil Refinery
Aliko Dangote, recognized as Africa’s wealthiest individual, is setting his sights on Kenya for a significant $17 billion oil refinery expected to produce 650,000 barrels per day. His interest in Kenya comes amidst frustration with the slow progress of oil facility developments in Tanzania. Tanzanian President Samia Suluhu Hassan recently expressed her discontent with Kenyan President William Ruto, revealing that she was not consulted about previous plans announced at an infrastructure summit.
Choosing Mombasa for Strategic Advantages
In an interview with the Financial Times, Dangote elaborated on his preference for a location in Mombasa, citing its larger and deeper port compared to Tanga, a proposed refinery site in Tanzania that is approximately 1,500 kilometers from Uganda’s oil fields. He projected the establishment cost for this venture could range from $15 billion to $17 billion.
East African Investment Needs Support
Diving deeper into the economic landscape, Dangote remarked on Kenya’s larger consumer base and economic prowess. He mentioned that crude oil can easily be shipped for refining, reducing the necessity for proximity to oil pipelines. Despite his plans, he emphasized that collaboration with President Ruto is crucial. “The ball is in President Ruto’s hands,” he stated, underscoring the need for land allocation, financing, and protection from the influx of cheap fuel from regions like Russia and India.
Assessing the Viability of NNPC’s New Partnerships
Concerns have erupted regarding the NNPC’s latest agreement involving two Chinese companies for the rehabilitation of the Port Harcourt and Warri refineries. A report from the Alliance for Ethics in Economic Research (AERE) highlighted the significant technical, financial, and operational risks associated with this partnership. It expressed skepticism about the capabilities of Sanjiang Chemical Co., Ltd. and Xingcheng (Fuzhou) Industrial Park Operation and Management Co., Ltd., noting their backgrounds do not align with the complexity and scale necessary for successful crude oil refinery management.
Scrutiny Over Financial Health and Expertise
While Sanjiang has generated revenues of approximately $2.55 billion, its profits have reportedly declined significantly. The assessment raised further concerns regarding Xingcheng, which lacks evidence of experience in oil refining. This report questions the rationale behind NNPC’s choice of partners for projects of such magnitude, given the background of the selected companies does not fit the profile of seasoned refinery operators.
NECA Demands Transparency and Accountability
Following government announcements about the MoU for the Port Harcourt refinery, NECA’s Director-General, Adewale Smut Oyelinde, emphasized the importance of transparency regarding past expenditures. He noted that since the 1990s, the Port Harcourt refinery has faced repeated rehabilitation attempts that have not yielded sustainable production. NECA advocates for the privatization of refineries rather than engaging in further costly maintenance agreements, reiterating that Nigeria cannot grow while relying on imported fuel, nor can it afford to invest further in idle refineries.
