…Puts refinery rehabilitation under one supervision
By Obas Esiedesa
AS part of measures to reduce operational cost and boost profitability, the NNPC Limited has shut down all unviable Strategic Business Units, SBUs, leaving it with only 21 subsidiaries.
Notably, the company has merged its oil field services, the Integrated Data Services Limited, IDSL, and Frontier Exploration to become NNPC Services Limited, EnSERV, with focus on exploration, seismic data management, and general oilfield services.
The national oil company has also streamlined its shipping operations with three entities, NIDAS Shipping Services, NIKOMA Shipping Services and Marine Logistics merged to become NNPC Shipping Company.
A source familiar with NNPC operations told Vanguard in Abuja that the company has also brought the ongoing rehabilitation of its three refineries located in Port Harcourt, Warri and Kaduna under a single supervision.
According to the source, who didn’t want to be named, “in a bid to optimise and reduce overhead costs, a couple of companies were merged and others were optimized for better operability and profitability. The former refining and petrochemical directorate was merged with downstream for better alignment with an improved cost effective structure.
“There were 25 subsidiaries in NNPC Limited prior to reorganization. All unviable SBUs were shut down in a bid to reduce overhead cost and optimize revenue. Businesses with duplicated functions were merged for economies of scale and optimization. New units were created like New Energies. This led to the reduction in the number of subsidiaries from 25 to 21
“The three refineries are currently undergoing rehabilitation and are managed as rehabilitation projects supervised by a refinery coordinator. Once completed, the plan is to hand the assets over to reputable third parties with experience to operate and maintain them”, the source added.
Speaking on the funding for the rehabilitation of the refineries, the source faulted the allegation that $1.6 billion was borrowed under former President Goodluck Jonathan.
“Under President Jonathan, no money was borrowed for Turn-Around Maintenance. Under President Muhammadu Buhari, only $1 billion was borrowed. Rehabilitation is still on-going”.
Checks by Vanguard showed that the cost approved by the Federal Government for the rehabilitation of the nation’s three refineries were $1.5 billion, $740 million and $548 million for Port Harcourt, Kaduna and Warri refineries, respectively.
The two Engineering Procurement and Construction, EPC, contractors are Tecnimont (France) for the Port Harcourt Refinery rehabilitation and Daewoo (South Korea) which oversees the quick fix projects at both Kaduna and Warri refineries. (Vanguard)