Yar’Adua Regrettably Reversed Sale of Refineries - Obasanjo

Former President Olusegun Obasanjo yesterday expressed regrets over the sale of two of the nation’s oil refineries, which was concluded before he exited office in 2007, but was reversed by his successor, the late President Umaru Musa Yar’Adua because he succumbed to pressure.

Obasanjo said this in an interview on Channels Television yesterday.

The former president said business mogul, Aliko Dangote, leading a consortium of investors, had paid $750 million for two of the refineries, as the federal government considered it difficult managing the plants at the time.
He explained that instead of Yar’Adua consolidating on the sale so that the investors could revamp the refineries, his successor succumbed to pressure and reversed their sale.

Obasanjo recalled that not only did his successor cancel the sale, he also refunded the $750 million paid by Dangote and other investors.

“The refineries are old and Dangote and some investors paid $750 million for two of the refineries. My successor came to office and reversed the sale. He even refunded the money they paid.

“So I went to him and asked him why he did this. He said it was because of pressure. So I wondered if the pressure by some people was more important than the interest of the whole nation,” he elaborated during the interview.

Obasanjo expressed regrets that Nigeria will hardly be able to sell the refineries for more than $250 million today because they are obsolete.

He pointed out that most people lacked foresight on the decisions taken by those before them before reversing those decisions, adding that most leaders succumb to sentiments instead of informed insight.

The former President's interview came on the heels of a statement by the Nigerian National Petroleum Corporation (NNPC) confirming the re-streaming of the Port Harcourt and Warri refineries after a phased rehabilitation over nine months conducted by its in-house engineers and technicians.

The corporation said yesterday that both plants had commenced preliminary production of petroleum products after successful test-runs, adding that while the Port Harcourt Refining Company (PHRC) was ramping up its operation to about 60 per cent of its 210,000 barrels per day (bpd) capacity, the Warri Refining and Petrochemicals Company’s (WRPC) was projected to hit 80 per cent of its installed 125,000bpd capacity

The corporation’s spokesman Ohi Alegbe said in the statement that the Port Harcourt refinery was projected to boost the nation’s local refining capacity with a product yield of five million litres of petrol per day while Warri refinery would contribute 3.5 million litres daily of petrol to local refining capacity. 

Providing insight into the rehabilitation exercise, NNPC said that it had to adopt the phased rehabilitation strategy after the Original Refinery Builders (ORB) who were initially contacted for the project came up with unfavourable terms.

“Though a decision was taken in 2011 to rehabilitate all the refineries using the ORB of each of the refineries, we were compelled to switch strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavourable terms.”

Alegbe stated that the nominated partners, as sole-bidders, came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations.

“The proxies were also unwilling to provide post rehabilitation performance guarantees.”

“The phased rehabilitation strategy, which entailed phased and simultaneous rehabilitation of all the refineries using in-house and locally available resources in line with the spirit and letter of the Nigerian Content Law, also involved the use of Original Equipment Manufacturer (OEM) representatives to effect major equipment overhaul and rehabilitation,” he said.