Against the backdrop of calls for the outright sale of the country's four refineries as a way of increasing local refining in Nigeria, the Petroleum and Natural Gas Senior Staff of Nigeria (PENGASSAN) has called on the Federal Government to adopt the Nigerian Liquefied Natural Gas (NLNG) model in managing the refineries.
PENGASSAN, which is the association of senior staff in the oil and gas industry in Nigeria, said that it was only the NLNG model that could protect the national interest and make the refineries operate at their full capacities.
Against the backdrop of calls for the outright sale of the country's four refineries as a way of increasing local refining in Nigeria, the Petroleum and Natural Gas Senior Staff of Nigeria (PENGASSAN) has called on the Federal Government to adopt the Nigerian Liquefied Natural Gas (NLNG) model in managing the refineries.
PENGASSAN, which is the association of senior staff in the oil and gas industry in Nigeria, said that it was only the NLNG model that could protect the national interest and make the refineries operate at their full capacities.
In the NLNG model, the Federal Government through the Nigerian National Petroleum Corporation (NNPC) owned 49 per cent of the equity share, while Shell Gas BV, Total LNG Limited and Eni International owned the remaining 51 per cent in different proportions, thus freeing the company from the overbearing control of government.
According to the oil workers union, the model would free the operations of the refineries from all encumbrances caused by bureaucracy and official bottlenecks that hinder them from performing at their optimal capacities.
Speaking on the proposed privatisation of the refineries, PENGASSAN President, Mr. Babatunde Ogun, explained that the major problem bedeviling the four refineries is lack of adequate autonomy for their boards.
He described the present situation where the Managing Directors of the refineries have an approval limit that could not even replace a nut in the plant let alone carrying out a Turn Around Maintenance (TAM) as detrimental to the efficient operations of the refineries.
Ogun stated that the NLNG model would allow for autonomy and give the management the latitude to decide on the day-to-day running operations of the refineries, adding that this would allow the refineries to produce at optimal capacity and compete with their peers all over the world.
He said: “There are many limiting factors that cannot allow our refineries to function at optimal capacities and as a major stakeholder we are also worried about this. We canvass that for the downstream sector to be active and for the anomalies in the functioning of the refineries to be corrected, what we need is liberalization but not privatization.
“This is what the government did with the telecommunications sector. If the market is liberalized, private investors will be able to come in with their investments and establish their refineries, while the existing refineries can operate side by side.
“In Nigeria, we are all living witnesses to the the fate that befell companies that have been privatized. Where are they today? Where is NITEL, Ajaokuta Steel Company Limited, Nigeria Iron Ore Mining Company (NIOMCO) and a host of others?
"For the same fate not to befall our refineries which is critical to our economy; we as the workers in that sector are advocating for the NLNG model where the government will hold some percentage of the equity and private investors will also be allowed to hold some equity share and operate the plants.
"This is the model we want to revitalise our refineries and reduce our over-dependence on importation of petroleum products with its inherent corruption and distortions to the nation's economy,” he stressed.
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