Port Harcourt Refinery: Revival signals new era for Nigeria
Years after it went comatose, the Port-Harcourt Refinery rose up from ‘death’, courtesy of the seriousness attached to the all-important plant by its owners, the Nigerian National Petroleum Corporation Ltd. (NNPCL).
Little did stakeholders anticipate such a milestone could be swiftly achieved, boosting Nigeria’s domestic refining capacity.
After years of delays, maintenance challenges, and rising dependency on imported refined petroleum products, the inauguration of the plant promises to be a potential shift in the country’s fuel supply dynamics.
While the government and industry stakeholders have lauded the achievement, the re-establishment of the operation did not go without hydra-headed challenges.
The Port-Harcourt refinery comprises two units, with the old facility capacity of 60,000 barrels per day (bpd) and the new plant, 150,000 bpd, both summing up to 210,000 bpd.
The refinery was shut down in March 2019 for the first phase of repair works after the government secured the services of Italy’s Maire Tecnimont to handle the review of the facility with the oil major Eni as technical adviser.
In 2021, NNPCL announced the commencement of works at the PHRC after the Federal Executive Council (FEC) approved $1.5 billion for the project.
In December 2023, the government announced the completion of the mechanical and the flare start-off, one of Nigeria’s oldest and most critical facilities, inaugurated to reduce dependency on foreign refineries.
With the capacity to process over 210,000 barrels of crude oil per day, the refinery is expected to significantly boost local production of petroleum products, including petrol, diesel, and kerosene.
In a landmark move, NNPC Ltd. officially began production at the facility, signalling a return to active refining operations after years of dormancy and extensive rehabilitation work.
The christening on Nov. 26 was attended by major stakeholders: government officials and industry experts, all of whom expressed optimism about the refinery’s potential to enhance domestic fuel supply and job creation.
While the inauguration is a monumental achievement, the journey to full operational capacity has not been without its noticeable hiccups.
Reports indicate that there are still several operational and logistical challenges facing the refinery, including issues with the supply of crude, infrastructure inadequacies, and technical glitches.
Also, there are concerns about the refinery’s ability to operate at full capacity consistently, as its systems have suffered from years of underinvestment.
The prolonged downtime and intermittent operations have raised doubts about whether the refinery can contribute meaningfully to meeting Nigeria’s domestic fuel needs without delay.
Though the refinery’s management has acknowledged some of the identified setbacks, it remains committed to resolving the issues in the short term to avoid further disruptions.
In spite of the challenges, stakeholders within Nigeria’s oil and gas sector, including Dr. Ayodele Oni, a partner at Bloomfield Law Practice, note the reopening is a positive step towards addressing the nation’s fuel supply crisis.
Oni says Port-Harcourt’s production is expected to significantly reduce the nation’s dependence on imported fuel, which has long been a source of concern due to the foreign exchange burden and the fluctuations in international oil prices.
According to him, for Nigeria’s local refineries, the Port-Harcourt refinery holds the promise of reducing the astronomical price of fuel imports by ultimately saving the country’s billions of dollars annually.
It is also anticipated to create thousands of jobs, both directly and indirectly through the supply chain, from transportation to distribution.
Mr. Mike Osatuyi, a former National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (lPMAN), says by the inauguration, the refinery is expected to contribute to Nigeria’s energy security by bolstering its refining capacity.
Osatuyi says this shift can pave the way for more refineries to return to full capacity and help Nigeria meet its increasing energy demand.
According to him, the refinery’s operational success could drive the government’s push for improved infrastructure in the downstream oil and gas sector, thereby creating a more self-sufficient and sustainable energy ecosystem.
“Local businesses and citizens stand to benefit from a more stable and reliable supply of fuel, which is crucial for everyday activities and economic growth.
Also, industry observers, according to him, will be quick to predict that an efficient, fully operational Port-Harcourt refinery can lead to a reduction in the country’s fuel scarcity, which has led to long queues at filling stations and rising fuel prices.
An energy expert, Mr. Salisu Danjuma, explains the corporation’s assignment should not end with the Port Harcourt refinery alone.
Danjuma notes the corporation has laid out plans to increase its capacity with the completion of the Warri and Kaduna refineries, as well as enhancing the operations of the Port Harcourt plant.
He believes the goal is to make Nigeria a net exporter of refined petroleum products, reducing the country’s dependency on imported fuels while creating a robust energy sector that can support both domestic and international demand.
According to him, while the current phase of the Port Harcourt refinery’s operations is a positive indicator of progress, NNPC Ltd. still faces the task of addressing its operational challenges and ensuring long-term sustainability.
“The government has committed to investing in more capacity expansion and technology upgrades to modernise the country’s refineries.
“The commissioning of the Port Harcourt refinery is undoubtedly a significant step for Nigeria’s oil and gas sector, with the potential to reduce the country’s fuel import bill and improve domestic fuel supply.
“While the refinery’s operations face some initial setbacks, the initiative is hailed by stakeholders as a critical move toward enhancing the nation’s energy security, boosting economic growth, and creating employment opportunities.
“Moving forward, the full success of the Port Harcourt Refinery will depend on the NNPC Ltd.’s ability to tackle its current operational challenges, ramp up production, and create a stable and efficient refining ecosystem.
“If these obstacles are overcome, Nigeria could see a transformative shift in its energy landscape, reducing its reliance on imports and promoting self-sufficiency,” he added.
Reacting, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) acknowledged the support of President Bola Tinubu, as well as the collaborative efforts of the NNPCL Board and contractors for the successful hauling of the facility.
Its President, Mr. William Akporehe, and General Secretary, Mr. Afolabi Olawale, described the commencement of the crude oil processing and the dispatch of petroleum products from the refinery as a landmark achievement that resonates with the aspirations of Nigerian citizens.
The union declared that the achievement demonstrated by NNPCL’s commitment to the country’s sustainable economic growth cannot be overemphasised.
It commended the group managing director of the corporation, Mele Kyari, for steering PHRC’s rehabilitation to completion, despite numerous challenges.
Nigeria owns four refineries: two in Port Harcourt and one each in Warri and Kaduna, but they have been moribund for years despite the Turn-Around-Maintenance (TAM) efforts.
The moribund state of the local refineries pushed Nigeria to depend solely on the importation of petroleum products for domestic use for several years, constituting a major drain on the nation’s foreign reserves.
For decades, successive administrations moves at reviving the nation’s refineries to reduce dependency on gasoline importation failed.
In 2015, former President Muhammadu Buhari pledged to optimise those performing below capacity and boost foreign reserves by halting importation of refined fuel.
In November 2018, that administration scheduled December 2019 as the terminal date for three of the refineries to attain full production capacity to end petroleum importation and later shifted the same to 2020.
Though, while the 2020 deadline was not realised, the government had spent N10.23 billion as of June 2020 on three of the refineries that processed zero crude.
By May 2023, the Federal House of Representatives Ad-hoc Committee on the state of refineries in the country made a disclosure that the federal government had spent over N11 trillion on the rehabilitation of the refineries between 2010 and 2023.
Just in August 2023, President Bola Tinubu's assurance that the PHRC would become functional by December after numerous failed attempts is now a reality.
By Yunus Yusuf
